Pricing Policies And Introduction Timing In A Logistics Service Supply Chain

Due to the rapid development of social economy and continuous innovation of business models, enterprises are faced with opportunities and challenges. In this circumstance, e-commerce model stands out from a wave of rapid developing business. As soon as it was launched, e-commerce quickly became popular with the suddenness of a thunderbolt. In such a context, the upgrade of products becomes more and more common. In order to survive in and even stand out from the fierce market competition, a multi-generational products supplier needs not only a rational enterprise development strategy make but also a keen market insight as well as the ability of making correct decision, along with a reasonable product pricing and assurance of the time of a new product launch. Pricing is an inevitable important decision for any enterprises. The pricing and time-to-market of any generation of a product is closely related to the pricing and related decisions of both the previous and the next generations of this product. Thus it is of great importance for both researchers and managers to research the optimal pricing and time-to-market of each generation of a product. In order to focus on the research and promotion of products, companies normally transfer the corresponding distribution services to third-party logistics companies in the Internet platform, involving the problem of the logistic companies to deal with the distribution. For those third-party logistics companies, their service level is restrained directly by the service cost. On the other hand, the determination of the service price is affected indirectly by the service level. Hence it is necessary to research corresponding decisions of the logistic companies in order to solve practical problems.Based on the basic structure of 1-1 logistics service supply chain, this paper analyzes the product integrators’ decisions on the pricing of multi-generational products and time-to-market of a new product and logistics service providers’ decisions on their service level and price. A profit maximization model is proposed according to different product strategies adopted by the product integrations under the condition that the demand is price sensitive and service-level sensitive, and an optimization method is used to analyze and solve the model. First of all, a decision-making analysis of two generations of products is made, and the conclusions are as follows:To the product providers, when the production of the first-generation product is greater than market demand and the sum of substitution degree of two generations greater than a certain critical value, there exists the optimal pricing of those two generations of products and an analytic expression is obtained. When the order quantity of the product is less than the second stage market demand, the optimal union pricing policy exists. There is a positive correlation between the optimal product order quantity of the second-generation product and the time-to-market of new product. The optimal time-to-market of new product exists. Under different production decisions, the joint optimal decision of the service pricing and level of service providers is related to unit cost of service and affected by the consumers parameters and product substitution degree. Secondly, the model is expanded to three generations of product, analyzing the market demand changes of product integrators and logistics service providers, as well as the relationship of their decision variables. Finally, an analysis of examples is applied to analyze the articulation of the optimal pricing of products integrators, time-to-market of new product, and the profit function, with focus on the relevant decision issues of two generations of product, giving some suggestions to decision-making according to relevant conclusions. In view of three generations of products, it is proved that the optimal union pricing exists, and an optimal pricing strategy on the basis of given service level and pricing is obtained with the help of a mathematical calculation example in the extended model. Providing a basis to solve practical problems, a better guidance for solving related decisions of products and service is afford to the product integrators and logistic service providers by the study of this article.