Supplier's R&D Investment in Manufacturer in A Decentralized Supply Chain with Quality and Price Sensitive Demand

DOI

10.2991/msmi-17.2017.50How to use a DOI?

Keywords

R&D investment; Quality improvement; Game theory

Abstract

This paper considers a supply chain with an upstream supplier and a downstream manufacturer, who faces a quality and price sensitive market demand. The supplier makes R&D investment in the manufacturer, which can lead to an improvement in the manufacturer's product quality, and hence, improve the efficiency of the entire supply chain. First, we derive the optimal retail price for the manufacturer, under any given R&D investment strategy of the supplier. Then, we characterize the supplier's optimal R&D investment strategy. We show that both the supplier and the manufacturer can benefit from such an investment, under certain condition.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

TY  - CONF
AU  - Hengyun Zhang
AU  - Ruoyu Lu
PY  - 2017/06
DA  - 2017/06
TI  - Supplier's R&D Investment in Manufacturer in A Decentralized Supply Chain with Quality and Price Sensitive Demand
BT  - Proceedings of the 2017 International Conference on Management Science and Management Innovation (MSMI 2017)
PB  - Atlantis Press
SP  - 231
EP  - 234
SN  - 2352-5428
UR  - https://doi.org/10.2991/msmi-17.2017.50
DO  - 10.2991/msmi-17.2017.50
ID  - Zhang2017/06
ER  -