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Open AccessArticle
Optimal Markup Pricing Strategies in a Green Supply Chain under Different Power Structures
by
Senbiao Li
Senbiao Li 1 and
Shuxiao Sun
Shuxiao Sun 2,*
1
School of Economics and Management, Minjiang University, Fuzhou 350108, China
2
Newhuadu Business School, Minjiang University, Fuzhou 350108, China
*
Author to whom correspondence should be addressed.
Mathematics 2024, 12(13), 2054; https://doi.org/10.3390/math12132054 (registering DOI)
Submission received: 30 May 2024
/
Revised: 27 June 2024
/
Accepted: 29 June 2024
/
Published: 30 June 2024
Abstract
Fixed-dollar and flexible markups are two markup pricing strategies commonly adopted in the retail industry, but their impacts on green behaviors of enterprises remain unknown. This paper investigates how the two markup pricing strategies influence firms’ managerial behaviors in a green supply chain, considering three power structures: Manufacturer Stackelberg, Retailer Stackelberg, and Vertical Nash. We find that the retailer’s pricing strategy choice is jointly affected by power structures and consumer sensitivity to product green levels. Particularly under Manufacturer Stackelberg, the fixed-markup strategy makes the retailer earn a higher profit. However, under Vertical Nash, the retailer’s pricing strategy depends on consumer sensitivity to green levels. When consumers are less sensitive to green levels, a flexible-dollar markup strategy is more profitable for the retailer; otherwise, the fixed-markup strategy is better. Additionally, for the manufacturer, the green levels of the product and the firm profit are always higher when the retailer adopts a fixed-dollar markup strategy under Manufacturer Stackelberg and Vertical Nash. Interestingly, if the retailer adopts a flexible-dollar markup strategy, the manufacturer has the “late-mover advantage” only when consumer sensitivity to the green level is high. Furthermore, the supply chain achieves the highest profit when the manufacturer acts as the leader under the fixed markup strategy.
Share and Cite
MDPI and ACS Style
Li, S.; Sun, S.
Optimal Markup Pricing Strategies in a Green Supply Chain under Different Power Structures. Mathematics 2024, 12, 2054.
https://doi.org/10.3390/math12132054
AMA Style
Li S, Sun S.
Optimal Markup Pricing Strategies in a Green Supply Chain under Different Power Structures. Mathematics. 2024; 12(13):2054.
https://doi.org/10.3390/math12132054
Chicago/Turabian Style
Li, Senbiao, and Shuxiao Sun.
2024. "Optimal Markup Pricing Strategies in a Green Supply Chain under Different Power Structures" Mathematics 12, no. 13: 2054.
https://doi.org/10.3390/math12132054
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