Research On Pricing And Order Decisions Of New Product Supply Chain Taking Retailer’s Exiting Risk Into Account

Nowadays, innovation has become the leading trend of the times and it is also the life of enterprise. Product innovation is a key link of enterprise innovation and the successful launch of new products is the source to make the enterprise have continuous market competitiveness. It needs mutual support of all the node enterprises of the supply chain. However, due to the uncertainty of consumer preferences, demand distribution and other uncertain aspects of new products, the sense of risk-sharing and cooperating with each other between supply chain members is not yet mature. So the retailer in the downstream supply chain will probably choose to terminate the cooperation relations and exit the new products supply chain which temporarily seems unprofitable since the income doesn’t meet the target or one part has found a more attractive partner.In order to lower the loss of profit of supply chain members and to make supply chain decisions more scientific with the retailer’s exiting risk, firstly this paper reviewed relevant literature research on new products, the supply chain of new products and the retailer’s exiting. Then we built a game model composed by a single supplier and a single retailer under the wholesale price contract. For different characteristics of the market demand distribution information of modified new products and fully new products, we analyzed the influence of retailer’s exiting risk on the supply chain performance of the two kinds of new product by respectively using decisions methods under full information and robust methods under partial information. At last, we compared the results of two kinds of circumstances. Through simulation analysis we found that: Compared to the traditional supply chain without exiting risk, the retailer’s exiting risk did have shock on the supply chain optimal decision and both sides’ profits of two kinds of new products. By further comparative analysis we also found that, in the case of unknown information of demand distribution(fully new products),the shock caused by retailer’s exiting risk on supply chain performance is much higher than the case of knowing demand distribution(modified new products).Research conclusions of this paper would be helpful to more reasonable and scientific decision-making for supply chain enterprises with retailer’s exiting risk. We also provided suggestions for retailers to set reasonable exiting criteria. Although the research on retailers’ exiting is just getting started, we believe that the impact of exiting risk on supply chain operation of new products will surely cause sufficient attention and research as we know further about the characteristics of demand information and the stability of the relationship between supply chain members of new products.