Developing a Pricing Model in a Retail and Chain Dual-Channel Supply Chain with Discounts and a Revenue-Sharing Contract

Document Type : Research/ Original/ Regular Article

Authors

1 Department of Industrial Engineering, Faculty of Engineering, Alzahra University, Tehran, Iran.

2 university alzahra

3 Department of Industrial Engineering, Faculty of Engineering, Alzahra University

Abstract

Most organizations use different channels to offer products and services in order to increase their market share and attract more customers. In a supply chain with more than one sales channel, product pricing is a critical issue in the decision-making process. Proper pricing can be very effective in reducing the conflict between channels and increasing the profitability of existing channels. In this paper, a pricing strategy between the dual retail and chain channels is presented to maximize profits by considering a discount in the chain channel and a revenue sharing contract between the manufacturer and the chain stores. The input parameters of the problem are adjusted using the Taguchi method and solved by the particle swarm metaheuristic algorithm in order to validate the model. Regarding the short solution time of the proposed algorithm, it has a good quality and efficiency in comparison to GAMS software. In addition, the gap of the objective value obtained by the proposed algorithm is less than 1% compared to the GAMS output. The results also show that the potential demand of the retail channel has a higher impact on the profit of the supply chain, in comparison to other parameters.

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History

  • Receive Date: 05 March 2022
  • Revise Date: 18 May 2022
  • Accept Date: 28 May 2022

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