Research On Decision-Making In Supply Chain With Fleeing Goods

The phenomenon, out-zone sale, which is called fleeing goods, have negative influence on the enterprises’distribution channels and decision-making strategies, which causes the channel conflict and the price war, ultimately damages the interests of the enterprise itself. The reasons why fleeing goods banned but widely practiced are related to many factors, such as price system confusion, channel management disorder, improper selection of agents and the supply chain participants’strategies.The models of fleeing goods supply chain under different circumstances are established in this paper, illustrating the reason why fleeing goods exists from the perspective of the supply chain. And the effect of fleeing goods in a supply chain system under the condition of manufacturer fairness preference and dominant agent is studied and analyzed. The results show that:(1) the manufacturer fairness preference will be beneficial for manufacturer itself, which could increase its own production and reduce the quantities that is out-zone sold by other speculators. The existence of fairness preference psychological of manufacturer would damage another manufacturer, reducing its product output and increasing the quantities that is out-zone sold by other speculators. Additionally, the manufacturer paid attention to fairness damages the utility of another manufacturer and the speculators. (2) The manufacturer fairness preference on supply chain channel affect the market entry decision itself and another manufacturer, as well as the out-zone sale decision. The manufacturer who has fairness preference will benefit from the increase of the competition intensity in the market. However, the increase of market competition intensity decreases the utility of another manufacturer and the speculators. (3) The manufacturer and the agent likely fall into the situation of the’Prisoner’s Dilemma’when there exists unauthorized distribution channels, this is the reason why the fleeing goods common exists in supply chain distributing channel. The manufacturer shall consider the value discount of the customer and the efforts of supervision and striking, meanwhile the manufacturer shall also consider the effect of the revenue reserve ratio from punishing the behavior of fleeing goods on the profit of it and another manufacturer to monitor the markets. (4) The value perception coefficient of the customer when they face unauthorized products will do affect the game equilibrium between manufacturer and agent, which affect the market order towards orderly direction. (5) The reservation price difference of the consumers between authorized products and unauthorized products will affect the dominant agent’s and the weak agent’s profit in the market that is out-zone sold by other agent. When reservation price difference is small, the profit of dominant agent and the weak agent is less than the profit under the condition that there is not fleeing goods. (6) The agent will profitable when the reservation price difference in the market that is out-zone sold by other agent keeps within a certain range, otherwise the agent has no motivation to flee goods. At this moment, the manufacturer has more motivation to supervise the out-zone sell phenomenon in the market, for fleeing goods damages the profit of manufacturer. In the marketing channel that exists dominant agent and the weak agent, the possibility of fleeing goods will be reduced greatly, which has a certain significance for manufacturers to manage the marketing channel.