Advertisement

Annals of Operations Research

, Volume 257, Issue 1–2, pp 317–333 | Cite as

Group buying decisions of competing retailers with emergency procurement

  • Rong Zhang
  • Bin Liu
Article

Abstract

Group buying has been in vogue for many years, particularly for short-life-cycle products. This paper investigates the effects of pricing and ordering in group buying, and considers the joint decision on pricing and ordering of short-life-cycle products in competing markets if retailers could provide the emergency procurement to meet all stochastic demands. It is shown that retailers always prefer to launch group buying in a single channel, which is also observed in a dual channel for competing retailers due to emergency procurement. These findings differ from those presented in the related literatures.

Keywords

Supply chain Emergency procurement Joint decision Group buying 

Notes

Acknowledgments

The authors gratefully acknowledge support from the National Natural Science Foundation of China through Grant U1204701, 71301045 and 71511117, and the Innovation Ability Construction Projects for Shanghai University through Grant 15590501800.

References

  1. Agrawal, V., & Seshadri, S. (2000). Impact of uncertainty and risk aversion on price and order quantity in the newsvendor problem. Manufacturing and Service Operations Management, 2(4), 410–423.CrossRefGoogle Scholar
  2. Anand, K. S., & Aron, R. (2003). Group buying on the web: A comparison of price-discovery mechanisms. Management Science, 49(11), 1546–1562.CrossRefGoogle Scholar
  3. Areddy, J. T. (2006, February 28). Chinese consumers overwhelm retailers with team tactics. Wall Street Journal, A1.Google Scholar
  4. Boehret, K. (2010, March 24). A deal on a haircut? That’s what friends are for. The Wall Street Journal, D3.Google Scholar
  5. Cai, G. S. (2010). Channel selection and coordination in dual-channel supply chains. Journal of Retailing, 86(1), 22–36.CrossRefGoogle Scholar
  6. Chen, F. R. (2005). Sales-force incentives, market information, and production inventory planning. Management Science, 51(1), 60–75.CrossRefGoogle Scholar
  7. Chen, R., & Roma, P. (2011). Group Buying of Competing Retailers. Production and Operations Management, 20(2), 181–197.CrossRefGoogle Scholar
  8. Chi, Chiang. (2001). A note on optimal policies for a periodic inventory system with emergency orders. Computer and Operations Research, 28(2), 93–103.CrossRefGoogle Scholar
  9. Fisher, M. L. (1997). What is the right supply chain for your product? Harvard business review, 75, 105–117.Google Scholar
  10. Jing, X. Q., & Xie, J. H. (2011). Group buying: A new mechanism for selling through social interactions. Management Science, 8(57), 1354–1372.CrossRefGoogle Scholar
  11. Kauffman, R. J., & Wang, B. (2001). New buyers’ arrival under dynamic pricing market microstructure: The case of group buying discounts on the Internet. Journal of Management Information Systems, 18(2), 157–188.CrossRefGoogle Scholar
  12. Li, C., Chawla, S., Rajan, U., & Sycara, K. (2004). Mechanism design for coalition formation and cost sharing in group-buying markets. Electronic Commence Research and Applications, 3(4), 341–354.CrossRefGoogle Scholar
  13. Petruzzi, N. C., & Dada, M. (1999). Pricing and the newsvendor problem: A review with extensions. Operations Research, 47(2), 183–194.CrossRefGoogle Scholar
  14. Ray, S. (2005). An integrated operations–marketing model for innovative products and services. International Journal of Production Economies, 95(3), 327–345.CrossRefGoogle Scholar
  15. Tagaras, George, & Vhchos, Dimitrios. (2001). A periodic review inventory system with emergency replenishments. Management Science, 47(3), 415–429.CrossRefGoogle Scholar
  16. Tsay, A., & Agrawal, N. (2000). Channel dynamics under price and service competition. Manufacturing and Service Operations Management, 2(4), 372–391.CrossRefGoogle Scholar
  17. Xie, J., & Neyret, A. (2009). Co-op advertising and pricing models in manufacturer–retailer supply chains. Computers and Industrial Engineering, 56, 1375–1385.CrossRefGoogle Scholar
  18. Yu, H., Deng, L., & Sun, C. (2011). A CVaR model of supply chain emergency assistance. Journal of Management Sciences in China, 14(6), 68–75.Google Scholar
  19. Zhang, R., Liu, B., & Wang, W. L. (2012). Pricing decisions in a dual channels system with different power structures. Economic Modelling, 29(2), 523–533.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.Research Center of LogisticsShanghai Maritime UniversityShanghaiChina
  2. 2.School of Economics and ManagementShanghai Maritime UniversityShanghaiChina

Personalised recommendations