Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/35897
Title: Optimal variety and pricing decisions of a supply chain with economies of scope
Authors: Xiao, TJ
Choi, TM 
Cheng, TCE 
Keywords: Channel leadership
Game theory
Pricing
Product variety
Supply chain management
Issue Date: 2015
Publisher: Institute of Electrical and Electronics Engineers
Source: IEEE transactions on engineering management, 2015, v. 62, no. 3, p. 411-420 How to cite?
Journal: IEEE transactions on engineering management 
Abstract: Motivated by observations that consumers demand product variety and scope economies or diseconomies for multiple products are prevalent, we develop two supply chain models under different channel leaderships, namely the retailer(-led) Stackelberg (RS) model and manufacturer(-led) Stackelberg (MS) model, to address the issues on product variety and pricing. In the RS case, we find that if it is not too costly to increase variety, the manufacturer's profit increases with diseconomies of scope, and it is optimal to provide a greater variety than the variety just covering the market under the centralized supply chain, while the decentralized supply chain provides a variety level just covering the market; however, the variety under the decentralized supply chain is greater than that under the centralized system. In addition, a higher shelf cost for the retailer strengthens the double marginalization effect. For the MS model, when we compare it with the RS model, we find that the retail price under the MS model is higher than that under the RS model, while the variety level under the MS model is higher when scope economies exist and whether variety and channel profit under the MS model are higher highly depends on shelf cost and marginal variety cost.
URI: http://hdl.handle.net/10397/35897
ISSN: 0018-9391
EISSN: 1558-0040
DOI: 10.1109/TEM.2015.2429143
Appears in Collections:Journal/Magazine Article

Access
View full-text via PolyU eLinks SFX Query
Show full item record

SCOPUSTM   
Citations

2
Last Week
0
Last month
Citations as of Sep 15, 2017

WEB OF SCIENCETM
Citations

3
Last Week
0
Last month
Citations as of Sep 22, 2017

Page view(s)

48
Last Week
5
Last month
Checked on Sep 25, 2017

Google ScholarTM

Check

Altmetric



Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.