Product pricing in a sustainable supply chain in the conditions of market boom and bust.

Articles in Press

Document Type : Research Paper

Authors

Department of Industrial Engineering, Yazd University, Yazd, Iran

Abstract

In this paper, the problem of product pricing in a sustainable supply chain consisting of several production centers, several distribution centers, and customers in two direct and indirect channels is modeled. This model aims to achieve more profit in a sustainable supply chain by complying with environmental and social considerations. In order to solve the model, a hybrid of genetic algorithm (GA) and grey wolf optimizer (GWO) called genetic grey wolf optimizer (GGWO) was developed, with the ability to search the problem-solving space based on the simultaneous use of the operators of the two algorithms. Analysis of the numerical example with GGWO and its comparison with other solution methods indicate that pricing in direct and indirect channels is strongly related to the price elasticity coefficient of the substitute product and the price elasticity of demand so that the market boom and bust of the depends on the proper determination of these model parameters. It is also observed that in the conditions if market boom, demand increased in both direct and indirect channels and that product prices decreased in both channels. Therefore, the marginal profit increased due to the sale of more products. The GGWO algorithm has faster convergence compared to GA and GGWO, while the solution time in this method is higher than other solution methods. Analyzing different numerical examples suggest that the efficiency of the used algorithms, in particular GGWO, is higher than exact methods.

Keywords

Main Subjects

References

Aliahmadi, A., Ghahremani-Nahr, J., & Nozari, H. (2023). Pricing decisions in the closed-loop supply chain network, taking into account the queuing system in production centers. Expert Systems with Applications, 212, 118741.
Babaeinesami, A., Ghasemi, P., Chobar, A. P., Sasouli, M. R., & Lajevardi, M. (2022). A New Wooden Supply Chain Model for Inventory Management Considering Environmental Pollution: A Genetic algorithm. Foundations of Computing and Decision Sciences, 47(4), 383-408.
Bae, J. H., & Rishi, M. (2018). Increasing consumer participation rates for green pricing programs: A choice experiment for South Korea. Energy Economics, 74, 490-502.
Barman, A., Das, R., & De, P. K. (2021). Optimal pricing and greening decision in a manufacturer retailer dual-channel supply chain. Materials Today: Proceedings, 42, 870-875.
Barman, A., De, P. K., Chakraborty, A. K., Lim, C. P., & Das, R. (2023). Optimal pricing policy in a three-layer dual-channel supply chain under government subsidy in green manufacturing. Mathematics and Computers in Simulation, 204, 401-429.
Barzinpour, F., & Taki, P. (2018). A dual-channel network design model in a green supply chain considering pricing and transportation mode choice. Journal of Intelligent Manufacturing, 29, 1465-1483.
Chen, J., Zhang, W., & Liu, Z. (2020). Joint pricing, services and quality decisions in a dual-channel supply chain. RAIRO-Operations Research, 54(4), 1041-1056.
Chen, X., Goh, M., Li, B., & Cheng, Y. (2021). Collection strategies and pricing decisions for dual channel EOL products. Computers & Industrial Engineering, 159, 107477.
Chobar, A. P., Adibi, M. A., & Kazemi, A. (2022). Multi-objective hub-spoke network design of perishable tourism products using combination machine learning and meta-heuristic algorithms. Environment, Development and Sustainability, 1-28.
Das, R., Barman, A., Roy, B., & De, P. K. (2023). Pricing and greening strategies in a dual-channel supply chain with cost and profit sharing contracts. Environment, Development and Sustainability, 25(6), 5053-5086.
Daneshvar, A., Radfar, R., Ghasemi, P., Bayanati, M., & Pourghader Chobar, A. (2023). Design of an optimal robust possibilistic model in the distribution chain network of agricultural products with high perishability under uncertainty. Sustainability, 15(15), 11669.
Ghasemi, P., & Abolghasemian, M. (2023). A Stackelberg game for closed-loop supply chains under uncertainty with genetic algorithm and gray wolf optimization. Supply Chain Analytics, 4, 100040.
He, P., He, Y., & Xu, H. (2019). Channel structure and pricing in a dual-channel closed-loop supply chain with government subsidy. International Journal of Production Economics, 213, 108-123.
He, P., Zhang, G., Wang, T. Y., & Si, Y. (2023). Optimal two-period pricing strategies in a dual-channel supply chain considering market change. Computers & Industrial Engineering, 179, 109193.
He, Y., Huang, H., & Li, D. (2020). Inventory and pricing decisions for a dual-channel supply chain with deteriorating products. Operational Research, 20, 1461-1503.
Heydari, J., Govindan, K., & Aslani, A. (2019). Pricing and greening decisions in a three-tier dual channel supply chain. International Journal of Production Economics, 217, 185-196.
Li, M., & Shan, M. (2023). Pricing and green promotion effort strategies in dual-channel green supply chain: considering e-commerce platform financing and free-riding. Journal of Business & Industrial Marketing.
Liu, C., Lee, C. K. M., & Zhang, L. L. (2022). Pricing strategy in a dual-channel supply chain with overconfident consumers. Computers & Industrial Engineering, 172, 108515.
Maharjan, R., & Kato, H. (2022). Resilient supply chain network design: a systematic literature review. Transport Reviews, 42(6), 739-761.
Mahmoudi, A., Govindan, K., Shishebori, D., & Mahmoudi, R. (2021). Product pricing problem in green and non-green multi-channel supply chains under government intervention and in the presence of third-party logistics companies. Computers & Industrial Engineering, 159, 107490.
Meng, Q., Li, M., Liu, W., Li, Z., & Zhang, J. (2021). Pricing policies of dual-channel green supply chain: Considering government subsidies and consumers' dual preferences. Sustainable Production and Consumption, 26, 1021-1030.
Nayeri, S., Paydar, M. M., Asadi-Gangraj, E., & Emami, S. (2020). Multi-objective fuzzy robust optimization approach to sustainable closed-loop supply chain network design. Computers & Industrial Engineering, 148, 106716.
Hajipour, V., Niaki, S. T. A., Akhgar, M., & Ansari, M. (2021). The healthcare supply chain network design with traceability: A novel algorithm. Computers & Industrial Engineering, 161, 107661.
Sazegari, S., Davoodi, S. M. R., & Goli, A. (2022). Pricing the green products in a sustainable supply chain with data envelopment analysis approach (case study: home appliance companies). Journal of applied research on industrial engineering, 9(2), 165-179.
Taleizadeh, A. A., Shahriari, M., & Sana, S. S. (2021). Pricing and coordination strategies in a dual channel supply chain with green production under cap and trade regulation. Sustainability, 13(21), 12232.
Waltho, C., Elhedhli, S., & Gzara, F. (2019). Green supply chain network design: A review focused on policy adoption and emission quantification. International Journal of Production Economics, 208, 305-318.
Wang, R., Nan, G., Chen, L., & Li, M. (2020). Channel integration choices and pricing strategies for competing dual-channel retailers. IEEE Transactions on Engineering Management, 69(5), 2260-2274.
Xu, J., Meng, Q., Chen, Y., & Zhao, J. (2023). Dual-channel pricing decisions for product recycling in green supply chain operations: Considering the impact of consumer loss aversion. International Journal of Environmental Research and Public Health, 20(3), 1792.
Xu, S., Tang, H., Lin, Z., & Lu, J. (2022). Pricing and sales-effort analysis of dual-channel supply chain with channel preference, cross-channel return and free riding behavior based on revenue-sharing contract. International Journal of Production Economics, 249, 108506.
Yan, N., Liu, Y., Xu, X., & He, X. (2020). Strategic dual-channel pricing games with e-retailer finance. European Journal of Operational Research, 283(1), 138-151.
Yang, D., & Xiao, T. (2017). Pricing and green level decisions of a green supply chain with governmental interventions under fuzzy uncertainties. Journal of Cleaner Production, 149, 1174-1187.
Zhang, C., Liu, Y., & Han, G. (2021). Two-stage pricing strategies of a dual-channel supply chain considering public green preference. Computers & Industrial Engineering, 151, 106988.
Zhen, L., Huang, L., & Wang, W. (2019). Green and sustainable closed-loop supply chain network design under uncertainty. Journal of cleaner production, 227, 1195-1209.
Journal of Industrial and Systems Engineering

Articles in Press, Accepted Manuscript
Available Online from 01 December 2023

Files

History

  • Receive Date: 01 December 2023
  • Accept Date: 01 December 2023

Share

How to cite

Statistics