Abstract
This paper examines the feasibility of employing subsidy contracts as a control mechanism to optimise the mobile phone sales channel. We investigate a dual-channel that consists of a telecommunication service operator (TSO) and a mobile phone manufacturer (MPM). The MPM×s optimal production quantity and optimal retail price and the TSO×s optimal service capacity and optimal service price are derived in both the decentralised and centralised MPSC models. The modelling results show that the coordinated MPSC leads to profit increase for the MPSC as a whole. More importantly, our analysis demonstrates that a properly designed subsidy contract can achieve the channel coordination in the MPSC. However, such channel coordination through subsidy contract is subject to certain conditions in which Pareto improvement can be achieved.
| Original language | English |
|---|---|
| Pages (from-to) | 97-104 |
| Number of pages | 8 |
| Journal | International Journal of Production Economics |
| Volume | 171 |
| DOIs | |
| Publication status | Published - 1 Jan 2016 |
Bibliographical note
Funding Information:The first two authors are supported by the Royal Society International Exchanges cost share scheme (Ref. IE131228 ) with the National Natural Science Foundation of China (No. 71411130137 ). The first author is also partially supported by the National Natural Science Foundation of China (Nos. 71272128 and 71432003 ), Program for New Century Excellent Talents in University (No. NCET-12-0087 ), and Specialised Research Fund for the Doctoral Program of Higher Education (No. 20130185110006 ).
Publisher Copyright:
© 2015 Elsevier B.V. All rights reserved.
Keywords
- Channel coordination
- Game theory
- Mobile phone supply chain
- Pricing policy
- Subsidy contract
ASJC Scopus subject areas
- General Business,Management and Accounting
- Economics and Econometrics
- Management Science and Operations Research
- Industrial and Manufacturing Engineering