Research On The Optimal Pricing Strategy Of Mass Customization Supply Chain Based On Risk Preference

Due to the huge potential of mass customization(MC)market,more and more enterprises begin to implement mass customization plan,and mass customization has gradually become an important industrial practice.Through the implementation of mass customization plan,enterprises can often charge more premium for MC products to obtain profits.In recent years,because of the development of mass customization,the competition in MC market is more and more fierce,and the enterprises who implement MC plan are facing more challenges and opportunities.The emergence of mass customization has changed the traditional supply chain pricing decision.Therefore,enterprises have to design their own mass customization plan and change their business strategies to adapt to the new business environment.In recent years,the supply chain of mass customization has attracted the attention of academia.However,the current research mainly focuses on the operation mode of supply chain,and few literature studies the supply chain of mass customization from the perspective of market factors,and this paper just develop the research from the perspective of market factors.The main research problems of this paper are as follows:First,considering the influence of market demand uncertainty when both manufacturer and two competitive retailers are risk averse,the Stackelberg game model is established to give the optimal price decision of manufacturers and retailers,and the influence of market factors on operation decision and supply chain profitability is discussed.The results show that a more risk averse manufacturer will provide a lower wholesale price,resulting in a lower retail price to the market.For retailers,if they are more risk averse,they will enable manufacturer to provide higher wholesale price and set lower retail prices.However,whether competitive retailer will raise or lower their retail price depends on the level of competition.In the fully competitive market environment,only when manufacturer and retailers are more risk averse and the correlation between demand uncertainty and market demand is high,the consumers who enjoy MC Service benefit more.Second,considering the MC product improvement scheme,that is,in order to obtain more profits,manufacturer can provide more options for customers through retailers so as to provide MC products with a higher level of customization.By describing the improved MC product planning model,the optimal prices strategy under the improved condition are given.It is found that whether MC product improvement plan is Pareto improvement depends on the degree of risk aversion and market uncertainty of supply chain members.When the members of the supply chain are less risk averse and the production cost increment is enough small,the MC product improvement scheme is Pareto improvement.From the perspective of market demand uncertainty,when the market demand violate is low enough and the production cost increment is small enough,MC product improvement scheme will achieve Pareto improvement.Third,charactering a supply chain consists of a risk-averse manufacturer with corporate social responsibility(CSR)and two risk-averse competitive retailers.The effects of risk aversion and corporate social responsibility level on supply chain optimal decision-making are discussed by using Stackelberg game model,and analysing the difference with CSR or not.The research shows that when considering corporate social responsibility,the impact of risk aversion on supply chain decision-making depends on the level of corporate social responsibility.However,whether CSR can increase or decrease prices and consumer welfare depends on the production cost.