Research On Advertisement Cooperation Strategy On Closed-Loop Supply Chain Considering Fairness Concerns

Closed-loop supply chain is getting more and more attention of governments and enterprises around the world as an energy saving and environmental way of development.Enterprises are facing more and more great social pressure as the resources are dwindling and the problem of environmental pollution is becoming increasingly serious.To protect the environment and save energy has become an important social responsibility of enterprises during the process of production.At the same time,the economic goal of the enterprises that act as economy is to obtain profits.With the pressure of social responsibility and corporate profits,enterprises choose the development mode of close-loop supply chain and look for a variety of ways to reduce the manufacturing cost and increase product sales.As one of the way to make the products know to more customers an increase consumer demand,advertising has been widely adopted.In the supply chains led by the manufacturers,national or international advertising strategies are adopted to enhance the brand awareness and form a deep impression of the brand in the customers' mind.While retailers would take local forms of advertising to attract consumers for they are faced with a more specific consumption environment.In order to improve the efficiency of local advertising,manufacturers tend to adopt cooperative advertising strategy to motivate the retailer to invest more in advertising.Thus the decision problem in cooperative advertising in supply chain occurred.And the behavior of fairness concerns of the supply chain members will also affect the decision-making behavior of manufacturers and retailers.The contributions of this study are as follows:(1)The decision model of advertisement cooperation under centralized decision-making case is established.By solving the decision model,the optimal decisions of the supply chain members and the optimal profit of the closed-loop supply chain are got in this paper.(2)The Stackelberg game model of advertisement cooperation under decentralized decision-making case is established without fairness concerns.And the optimal decisions under different advertisement corporation strategies are given.By comparing the optimal decisions,the conclusion that the strategy of advertising cost sharing is better than the strategy of price discount in some certain cases is reached.(3)The retailer's behavior of fairness concerns is introduced into the Stackelberg game model of advertisement cooperation.The decision behavior of the supply chain members are analyzed when the retailer take the manufacturer's profit as his reference point.(4)Nash Bargaining Solution is introduced into the decision model as the reference point of the retailer 's fairness concerns and the optimal decisions of the manufacturer and the retailer are given.Through the study,the follow conclusion is given:in the strategy of advertising cost sharing,the retailer's behavior of fairness concerns can make the closed-loop supply chains achieve coordination.