A Three-period Supply Chain Pricing Strategy That Considers Reference Price Effects And Diseconomies Of Scale

In reality,both supply chain leadership and consumer behavior have significant influences on channel members' decisions.In addition,there might be diseconomies of scale in the production process of manufacturers.Thus,it is of great theoretical value and practical significance to investigate the impacts of the above factors on multi-period pricing strategies.For the two-echelon supply chain system consisting of one manufacturer and one retailer,considering consumers' reference price effect and production diseconomies,dynamic game models are established and derived based on three different channel power structures(manufacturer-led,retailer-led and equal power of both parties),combined with two wholesale price strategies(uniform wholesale price and differentiated wholesale prices)that manufacturers may adopt and the pricing periods of both parties.The game model explores the pricing strategy of three-period supply chain under four decision modes.Based on theoretical derivation and numerical simulation,the equilibrium wholesale prices,retail prices,member profits and total system profits under different decision-making modes are compared,and the influences of diseconomies of scale degree and reference price effect are analyzed.The results show that:(1)From the perspective of the manufacturer's profit,both mode II and mode IV may be the best choice under the two structures of manufacturer-led and equal power.Mode I is always the worst choice for the manufacturer;in retailer-led mode,mode II and mode I are the best and worst choice for the manufacturer,respectively.Therefore,the optimal choice of manufacturers is less related to market power structure,reference price effect and diseconomies of scale;(2)From the perspective of retailer's profit,under the manufacturer-led mode,mode III and mode II are the best and worst choices for the retailer,respectively;in the retailer-led mode,mode IV and mode II are the best and worst choices for the retailer,respectively;when the two parties have equal power,mode I or mode III may be the best choice for the retailer,while mode II or mode IV may be the worst choice for the retailer.So the optimal choice of the retailer is closely related to market power structure,reference price effect and scale diseconomy.But model II will never be the best choice for the retailer;(3)From the perspective of total profit of supply chain system,in the manufacturer-led mode,the total profit of mode IV and mode I is the highest and the lowest,respectively;in the retailer-led mode,the total profit of mode II and mode I is the highest and the lowest,respectively;when the two parties have equal power,except for mode II,the total profit of mode IV and mode III is the highest and the lowest,respectively.However,the total profit of model II depends on the coefficient of diseconomies of scale and reference price effect.The different combinations of these two parameters will make the total profit of mode II vary from the lowest to the highest in four decision modes.The conclusion of this paper can provide decision reference for enterprises to make price strategies in complex dynamic environment.