Consumers' purchasing decisions of a dual-channel supply chain system under return and warranty policies

With the rapid growth of internet technology, particularly during the COVID-19 pandemic, a major portion of consumers have intended to do online shopping. Also the use of eco-friendly products is essential in today's environment and human health. Thus this paper investigates the consumers' purchasing behaviour towards substitutable non-green and eco-friendly products in a dual-channel (offline and online channels) supply chain system. The manufacturer offers a novel combination of promotions such as a return policy in the online channel and a warranty policy in the offline channel depending on the position and situation of consumers. Here, the environmental burden is reduced by considering remanufacturing/refurbishing used products during the warranty period. Therefore, consumers' demand depends on price, eco-friendliness level, warranty and return agreements. The entire problem is modelled under centralised and decentralised decision-making scenarios. Finally, the profit maximisation problem is formulated and solved in the game theory framework. A series of sensitivity analyses of various parameters is conducted numerically to validate the problem. It is observed that, due to the instant return facility in the online channel, online demand is higher than the offline with a higher warranty period. © 2023 Informa UK Limited, trading as Taylor & Francis Group.

Sustainable agri-pricing towards smallholder's profit: A modified buffer stock operations model under B2B contractual supply chain

Random growing demand for high-quality agri-products raises a pseudo pressure on mass-producing Asian tropical regions and lowers Asian smallholders’ profit. Literature indicates that the Buffer stock operations (BSO) policy performs well in maintaining sustainable profit for smallholder farmers and retailers. However, with the changing market and growing demand, the conventional BSO lacks efficiency in policymaking and incorporates market distortion. The outburst of COVID-19, random market intervention, growing e-commerce portals, and increasing price declination in the physical market have significantly reduced the smallholders’ profit. Thus, this paper modifies the conventional model and proposes a B2B contractual supply chain framework to integrate the BSO model. The supply chain framework considers two different channel leadership strategies, Government Leadership and Farmer Leadership. Following the leadership strategies, this study is concerned with the equilibrium state of the supply chain drivers (the farmer, the retailer, and the government). The proposed framework formulates the model through Stackelberg game modeling and solves using sub-game perfect Nash equilibrium. The theoretical results (Lemmas) ensure that the government leadership strategy facilitates an equilibrium state and sets an optimal profit for farmers and retailers and an optimal social welfare function. Although the farmer’s leadership strategy ensures an equilibrium state between the farmer and the retailer, it neither guarantees an equilibrium and optimal state between farmers and government nor an optimal social welfare function. The numerical case illustration considers a wide variety of the market’s price sensitivity coefficients. It guides the policy-maker and the supply chain drivers to understand strategy selection better.

Incentives to Enhance Production Reliability against Disruption: Cost-Sharing vs. Penalty

Two kinds of incentive strategies, cost-sharing and penalty, are examined in dealing with production disruption, with consideration of production process reliability as an endogenous factor for a two-echelon supply chain. Based on the Stackelberg game framework, we derive the optimal decisions of supply chain partners and compare their expected profits with different strategies. Considering the uncertain demand and the retailer’s preference against the risk, we further analyze how the partners’ decisions and the retailer’s expected profit are influenced by the feature of loss aversion. From theoretical analysis and numerical experiments, we find that: (1) overall, a penalty strategy dominates that of cost-sharing for the retailer, whereas the reverse applies with respect to the manufacturer;(2) a penalty strategy may outperform a cost-sharing strategy for the whole supply chain, depending on demand;and (3) a reasonable aversion against risk can help the retailer to achieve a more robust result when a penalty strategy is adopted under volatile and unpredictable demand.

Investment strategy for blockchain technology in a shipping supply chain.

In the post-COVID-19 pandemic era, how to promote blockchain technology to improve the efficiency of port customs clearance and logistics transparency has become a hot research question in the shipping industry. In this paper, we investigate the value of blockchain-based vertical cooperation led by a port or a shipping company in a one-to-two shipping service competition model. A status quo scenario and two different investment scenarios led by different stakeholders are constructed, and equilibrium solutions of the Stackelberg game in three scenarios are proposed. Meanwhile, consumer surplus and social welfare under different cooperation frameworks are discussed. We find that i) investment in blockchain technology can significantly increase the profits of shipping supply chain participants. ii) From the point of view of profit, when the investment efficiency of the port and the shipping company satisfies a certain relationship, there is a balanced strategy for both parties to invest in blockchain technology. iii) The more intense the competition for the services of shipping companies, the lower the level of blockchain technology to improve the logistics capabilities of the shipping supply chain participants. iv) The port's investment in blockchain technology brings more consumer surplus and social welfare. The abovementioned findings can provide managerial insights for ports and shipping companies and present decision support for the government to formulate blockchain technology promotion policies.

Research on the Impact of COVID-19 on Import and Export Strategies

Due to the spread of COVID-19, the public health crisis is bound to have a huge impact on the world economy and international trade. How to study the import and export strategies under the coronavirus pandemic has become a major issue that many scholars need to solve urgently. Therefore, a two-stage game model is constructed, and the reverse solution method is used to obtain the optimal output of enterprises in importing countries and exporting countries before and after the outbreak of pandemic, as well as the optimal subsidies for enterprises from exporting countries and the optimal import quarantine rate for importing countries. Based on the game between the two countries without the pandemic outbreak, the impact of the pandemic on the output, profits, and social welfare of enterprises in the two countries was compared. Enterprises in exporting countries face double threats from the pandemic and import quarantine fees. The increase in import quarantine fees reduces the social welfare of exporting countries. In order to effectively control the spread of the pandemic, subsidies are an effective means to restore exports to normal. Reasonable collection of import quarantine fees by importing countries can promote bilateral trade, but an excessive collection will be counterproductive. The governments of exporting countries should establish emergency mechanisms and relevant subsidy policies, and enterprises should continuously improve their competitiveness. At the same time, countries should abandon the concept of trade protection and negotiate and cooperate to jointly deal with the pandemic.

Decision-Making of Transnational Supply Chain Considering Tariff and Third-Party Logistics Service

Countries’ economic policies, such as tariff barriers, have a profound impact on the global economy and international trade. The imposition of tariffs seriously disturbs the global trade and supply chain operations. This paper studies a supply chain composed of an overseas manufacturer, a domestic supplier and a third-party integrated international logistics service provider. A three-level decentralized leader-follower decision-making model and its variant--leader-follower alliance decision-making models are established, and the influences of revenue sharing and cost sharing on the three-level decentralized decision-making are analyzed. The results show that it is difficult for the supply chain to achieve coordination when the transportation and insurance costs are considered in the tariff cost. The increase of tariff rates will reduce the profits of all parties and the overall profit of the supply chain, and weaken the dominant position of the supplier in the supply chain. Revenue sharing can improve the supply chain performance;the performance of the whole supply chain cannot be improved or may even deteriorate by sharing the transportation cost alone. The study can provide practitioners with implications for how to carry effective cooperation and coordination in the supply chain and how to effectively reduce the influence of tariffs in the global trade system.

Prevention schemes for future fresh agricultural products (FAPs) supply chain: mathematical model and experience of guaranteeing the supply of FAPs during the COVID-19 pandemic.

BACKGROUND: The COVID-19 outbreak caused short-term disruptions in the supply chain of fresh agricultural products (FAPs), which exposed the vulnerability of the existing FAP supply chain. With pandemic control being widely coordinated, the supply chain of FAPs was gradually optimized and improved. However, after the outbreak of COVID-19, achieving an effective supply of FAPs in future pandemics has become a key issue. The present work therefore aimed to construct a three-level supply chain based on the Stackelberg game model, consisting of suppliers, third-party logistics (TPL), and retailers, to guarantee the supply of FAPs. COVID-19 pandemic factors such as virus infection coefficients and pandemic prevention efforts were fully integrated into the model. RESULTS: Compared with the wholesale prices of FAPs, preservation efforts and pandemic prevention efforts have huge impacts on the retail prices of FAPs. When suppliers are in the leading position, the quality assurance effort level is positively correlated with the optimal profit. Compared with this situation, when FAP retailers are in the leading position, TPL providers show higher levels of pandemic prevention effort and FAP preservation effort. With an increase in consumer preference for pandemic prevention, the profits of supply-chain members when FAP retailers are in the leading position will gradually increase. CONCLUSION: This study reveals an effective supply mechanism for FAPs in metropolitan areas during the COVID-19 pandemic and describes the authors' experience of guaranteeing the quality and safety of FAPs for future pandemic cases. © 2021 Society of Chemical Industry.

Reducing risk of infection - The COVID-19 queueing game.

The COVID-19 pandemic has forced numerous businesses such as department stores and supermarkets to limit the number of shoppers inside the store at any given time to minimize infection rates. We construct and analyze two models designed to optimize queue sizes and customer waiting times to ensure safety. In both models, customers arrive randomly at the store and, after receiving permission to enter, pass through two service phases: shopping and payment. Each customer spends a random period of time shopping (first phase) and then proceeds to the payment area of the store (second phase) where cashiers are assigned to serve customers. We propose a novel approach by which to calculate the risk of a customer being infected while queueing outside the store, while shopping, and while checking out with a cashier. The risk is proportional to the second factorial moment of the number of customers occupying the space in each phase of the shopping route. We derive equilibrium strategies for a Stackelberg game in which the authority acts as a leader who first chooses the maximum number of customers allowed inside the store to minimize the risk of infection. In the first model, store' management chooses the number of cashiers to provide to minimize its operational costs and its customers' implied waiting costs based on the number allowed in the store. In the second model, the store partitions its total space into two separate areas - one for shoppers and one for the cashiers and payers - to increase cashiers' safety. Our findings and analysis are useful and applicable for authorities and businesses alike in their efforts to protect both customers and employees while reducing associated costs.

Competitive pricing of substitute products under supply disruption.

There has been an increased interest in optimizing pricing and sourcing decisions under supplier competition with supply disruptions. In this paper, we conduct an analytical game-theoretical study to examine the effects of supply capacity disruption timing on pricing decisions for substitute products in a two-supplier one-retailer supply chain setting. We investigate whether the timing of a disruption may significantly impact the optimal pricing strategy of the retailer. We derive the optimal pricing strategy and ordering levels with both disruption timing and product substitution. By exploring both the Nash and Stackelberg games, we find that the order quantity with the disrupted supplier depends on price leadership and it tends to increase when the non-disrupted supplier is the leader. Moreover, the equilibrium market retail prices are higher under higher levels of disruption for the Nash game, compared to the Stackelberg game. We also uncover that the non-disrupted supplier can always charge the highest wholesale price if a disruption occurs before orders are received. This highlights the critical role of order timing. The insights can help operations managers to proper design risk mitigation ordering strategies and re-design the supply contracts in the presence of product substitution under supply disruptions.