A Study On The Inventory And Pricing Decisions In Supply Chain With Dominant Retailers

In the supply chain management, the traditional model is built on the basis of dominant manufacturers. However, with the development of the market, the enterprise’s decision-making power has been gradually transferred to the retailer. The retailers have the stronger power in some cases than the manufacturers. Under the case of dominant retailers, many experts and scholars at home and abroad have done a lot of researches and discussions on how the supply chain members should decide. In this paper, we study the inventory and pricing decisions under the case of dominant retailers from two aspects of the reverse auction and the contractual relationship.Under the reverse auction mechanism, by using elasticity of lost-sales rate, we study the retailer’s purchasing and pricing decisions under the general stochastic demand, and numerical examples under truncated normal demand distribution are given. This provides an important reference basis for the retailers using reverse auction for purchase and pricing marketing. As for the sourcing scenario under the contract relationship, we study the wholesale price contract and two-part tariffs contract, which are compared with the situation of dominant manufacturers from the aspects of theory and numerical examples. Finally, we give a reasonable ex-planation for the use of the entrance fee in the retail industry, based on both the reverse auction mechanism and two-part tariffs.