Work

Decision-Making in Complementary Products Supply Chain: Game Theory and Sensitivity Analysis

Year: 2025

Type: article

Abstract: This paper explores how to reduce supply-demand conflicts in supply chains by utilizing complementary products’ unique relationships and shared objectives. Also, it considers the service level concerns of consumers. Primarily employing game theory, this paper analyzes the pricing strategies of complementary products within a three-tier dual-channel supply chain, the relationship between pricing and service levels, and the performance optimization across channels. Numerical results demonstrate that elevated values of α1 indicate heightened consumer sensitivity to manufacturer price fluctuations. To sustain sales volume, manufacturers are compelled to reduce prices, consequently leading to a decline in equilibrium prices within the market. A rise in β1 induces an across-the-board increase in all price tiers, albeit with differential magnitudes. The intensification of channel competition α2 exerts downward pressure on all pricing components. The retailer’s price demonstrates maximal responsiveness to β2 fluctuations, as retailers directly absorb cost variances.

Source: Systems

DOI: 10.3390/systems13050360

Authors: Jiashu Cai, Yong Wang, Xi Wang, Jiamin Zhang, Lihui Wang

Institutions: Wuhan University of Technology, Wuhan University of Science and Technology, KTH Royal Institute of Technology

Language: English

Topic: Supply Chain and Inventory Management

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $2,896

Funder: Wuhan University