Research On Pricing Decisions Under Different Strategic Choices In Complementary Product Supply Chains

With the rapid development of science and technology,the products’ categories become wider and the products’ update cycle is shorter.As competitions among products are increasingly fierce,more and more enterprises begin to pay attention to cooperation relationships in two supply chains with complementary products.There are interdependent relationship between complementary products.The productions and sales of complementary products not only happen between departments and between firms,but also between the supply chains.Based on two supply chains with complementary products structure,we respectively analyse the impact of different integration strategies and information sharing strategies on pricing decisions and the supply chain performance.Firstly,we analyse the influence of vertical integration strategy and horizontal integration strategy on pricing decisions and supply chain performance in two supply chains with complementary products.We establish five pricing decision models,which are centralized model,decentralized model,vertical integration model,upstream horizontal integration model and downstream horizontal integration model.From comparisons and analysis about the optimal prices and maximal profits,we find that the wholesale/retail prices increase with the increase of unit cost and basic market demand;but the wholesale/retail prices decrease as the basic market demand of its complementary products and self/cross sensitive coefficients increase.For manufacturers,downstream horizontal integration strategy is better than upstream horizontal integration strategy.For retailers,upstream horizontal integration strategy is better than downstream horizontal integration strategy.For the whole supply chain,vertical integration strategy is better than horizontal integration strategies,and the profits of two horizontal integration strategies is equal.Secondly,considering both manufacturers and retailers have information about uncertain market demand,we analyse the influence of two-way information sharing strategy on pricing decisions and supply chain performance in two supply chains with complementary products.Four pricing decision models under information sharing strategies of are established.First,manufacturers’ and retailers’ forecast information on pricing decisions are studied.Second,we study the effects of information sharing strategies on supply chain’s profits and expected profits.Third,the effects of different parameter values on expected profits are also studied.Then we find that the lower the degree of complementary,the larger impacts of the manufacturers and retailers forecast information on pricing decisions.Under information sharing strategies,the manufacturers’ expected profits are lager,the profits of manufacturers and retailers and the expected profits of the retailer and the whole supply chain are larger only under certain conditions respectively.When making information sharing strategy in the complementary chain,both the manufacturer’s and the entire supply chain’s expected profits are lager,but the retailer’s expected profit is lower.