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Supply Chain Models with Considerations of Co-Op Advertising and Capacity Constraints

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DOI: 10.4236/ojbm.2018.62039    333 Downloads   560 Views
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ABSTRACT

Today’s marketing competition focuses on the supply chain members to make its own interests maximize through cooperation. This article establishes a simple secondary supply chain consisting of a retailer and a manufacturer. Through the establishment of a Stackelberg game model and a partnership game model, we study the decision of the member enterprises in the supply chain under the restriction of capacity. The research results show that if the production capacity is smaller, the manufacturer will choose full-load production. If the production capacity is sufficient, the manufacturer will no longer produce more products because its profit may be lost. The lack of production capacity makes the manufacturer not take the initiative to share the advertising costs of retailers. But when the capacity is sufficient, the manufacture shares 1/3 of advertising costs. In addition, whether manufacturers and retailers choose to cooperate in the case of a small capacity, the profit of the supply chain will not change.

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Yang, F. (2018) Supply Chain Models with Considerations of Co-Op Advertising and Capacity Constraints. Open Journal of Business and Management, 6, 518-538. doi: 10.4236/ojbm.2018.62039.

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