Pricing, Production And Distribution Decision Research In A Two-stage Supply Chain Based On Cost Learning Effect

Nowadays many kinds of manufacturing industry can accumulate the experience of product production, technology design and management work in the process of long-term production, which led to the decrease of the long-term average cost by increasing the output. In this paper, according to the characteristics of the production enterprises with cost learning effect, the manufacturer production process is divided into two stages. The unit production cost of the second stage will lower than the first stage. In addition, manufacturer can not only sell products to retailers who then sell products to consumers, but also use their own direct channel to sell products directly to consumers.In this paper, we study how producer makes wholesale price and how to choose the distribution channel of two stages to make profits maximization. First, study the manufacturer decision problem in one stage separately which as a reference, namely the manufacturer choose what kind of channel can gain more profits in the single stage. Second, study the effect of first stage's production output on the distribution channel choice in the second stage, namely according to the output of first stage, manufacturer chooses what kind of channel can gets maximize profits in the second stage. Then, on the basis of the researches of second stage, we study decision of wholesale price?production output and distribution channel which makes manufacturer gets maximize profits in two stages. We find that there are three different price?production output and channel selection strategies for manufacturer according to the change of unit production cost. Finally through equilibrium analysis and a numerical example to observe these strategies. End of the article is summary to the research problem.