Intl Conference on Economics, Finance & Business, Paris

DYNAMIC PRICING STRATEGIES FOR DUAL-CHANNEL SUPPLY CHAIN OF NEARLY EXPIRED FOODS UNDER DIFFERENT POWER STRUCTURES

YATING LIU, ZHANG QING, XIAO QIUYING

Abstract:

With the change of consumers' concepts, the popularity of online shopping and the strong publicity of online platforms, nearly expired food is more and more accepted by consumers. Since nearly expired food is featured with lower selling price as it approaches the shelf life, this paper investigates the dynamic pricing strategy of expired food in two stages. At the same time, considering that different supply chain power structures also have different impacts on the pricing of nearly expired food, this paper will explore the dual-channel dynamic pricing strategies under different power structures. In this paper, the dynamic pricing model of the two-channel supply chain of nearly expired food is constructed under manufacturers' dominance and mixed dominance of manufacturers and network platforms respectively, and the two-stage optimal pricing and optimal profit are solved according to the game theory. It is found that there exists a two-stage optimal pricing strategy to maximize supply chain profits. The two-stage pricing of nearly expired food in the dual-channel under the mixed dominance is smaller than that under the manufacturer's dominance. The total manufacturer profit and total retailer profit of both stages are larger in the manufacturer-dominated dual-channel supply chain model, but the manufacturer's profit from online channel sales is higher in the mixed-power-dominated model than in the manufacturer-power-dominated model. Suppliers of nearly expired food can choose the appropriate channel to sell according to the product characteristics. Finally, by solving the centralized decision-making model for the dual-channel supply chain of nearly expired food, it is obtained that under the centralized decision-making, although the pricing in both stages is lower than the decentralized decision-making mentioned above, the total profit of the supply chain is the highest, which indicates that manufacturers and retailers can achieve higher profits by developing revenue-sharing contracts, reducing channel competition, and adopting cooperative pricing.

Keywords: nearly expired food; dynamic pricing; dual-channel supply chain; power structures