Price-Quoting Strategies of an Upstream Supplier

• 成果类型: Article
• 署名作者: Hu, Bin; Beil, Damian R.; Duenyas, Izak
• 署名单位: University of North Carolina; University of North Carolina Chapel Hill; University of Michigan System; University of Michigan
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.1120.1697
• 发表日期: 2013
• 页码: 2093-2110
• 关键词: multitier supply chain; auctions; price discrimination

摘要

This paper studies an upstream supplier who quotes prices for a key component to multiple sellers that compete for an end-buyer's indivisible contract. At most one of the supplier's quotes may result in downstream contracting and hence produce revenue for her. We characterize the supplier's optimal price-quoting strategies and show that she will use one of two possible types of strategies, with her choice depending on the sellers' profit potentials relative to their uncertainties: secure, whereby she will always have business; or risky, whereby she may not have business. Addressing potential fairness concerns, we also study price-quoting strategies in which all sellers receive equal quotes. Finally, we show that the supplier's optimal mechanism resembles auctioning a single quote among the sellers. This paper can assist upstream suppliers in their pricing decisions and provides general insights into multitier supply chains' pricing dynamics.