Pricing and Ordering Decisions in a Retailer Dominant Channel Involving a Third-Party Logistics Provider

<table class="fixed-width table-group" id="tab5"><tr><td><table class="table"><colgroup><col style="width:4.38em"/><col style="width:7.96em"/><col style="width:6.85em"/><col style="width:6.85em"/><col style="width:6.85em"/><col style="width:7.96em"/></colgroup><tr><td class="thead-hr" colspan="6"><hr/></td></tr><tr class="thead"><td class="align_left">Risk</td><td class="align_center">Maximum order quantity</td><td class="align_center">Service price</td><td class="align_center">Service level</td><td class="align_center">Wholesale price</td><td class="align_center">Optimal order quantity</td></tr><tr><td class="thead-hr" colspan="6"><hr/></td></tr><tr><td class="align_left"><span style="width: 40.4985ptpx;"><svg height="13.8563pt" id="M213" style="vertical-align:-2.150701pt" version="1.1" viewbox="-0.0498162 -11.7056 40.4985 13.8563" width="40.4985pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M384 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transform="matrix(.013,0,0,-0.013,34.12,0)"><path d="M285 378C315 398 338 416 353 432C373 451 384 474 384 503C384 579 325 635 236 635H235C182 635 136 610 108 579L65 516L85 496C110 533 150 575 205 575C258 575 300 543 300 481C300 407 232 369 141 339L147 310C163 315 188 321 211 321C268 321 338 284 338 192C338 94 288 40 217 40C160 40 119 68 93 91C85 98 77 97 69 91C60 84 47 71 46 58C44 46 48 35 62 22C75 10 116 -12 162 -12C234 -12 424 62 424 224C424 297 373 359 285 376V378Z"></path></g></svg></span></td><td class="align_center">1,212.00</td><td class="align_center">4.04</td><td class="align_center">2.04</td><td class="align_center">7.06</td><td class="align_center">204.00</td></tr><tr><td class="align_left"><span style="width: 40.4985ptpx;"><svg height="13.8563pt" id="M214" style="vertical-align:-2.150701pt" version="1.1" viewbox="-0.0498162 -11.7056 40.4985 13.8563" width="40.4985pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M384 0V27C293 34 287 42 287 114V635C232 613 172 594 109 583V559L157 557C201 555 205 550 205 499V114C205 42 199 34 109 27V0H384Z"></path></g><g transform="matrix(.013,0,0,-0.013,6.24,0)"><path d="M412 140C382 77 369 73 315 73H129L270 222C362 320 402 379 402 466C402 571 322 635 234 635C177 635 130 609 99 576L42 495L64 475C90 514 133 568 201 568C274 568 318 519 318 435C318 349 255 267 193 193C144 135 87 78 32 23V0H405C417 45 427 89 440 131L412 140Z"></path></g><g transform="matrix(.013,0,0,-0.013,12.48,0)"><path d="M241 635C89 635 35 457 35 312C35 153 89 -12 240 -12C390 -12 443 166 443 312C443 466 390 635 241 635ZM238 602C329 602 354 454 354 312C354 172 330 22 240 22C152 22 124 173 124 313S148 602 238 602Z"></path></g><g transform="matrix(.013,0,0,-0.013,18.79,0)"><path d="M368 703H309L44 -163H104L368 703Z"></path></g><g transform="matrix(.013,0,0,-0.013,24.151,-1.465)"><path d="M782 731H740L476 -79H474L280 352L133 274L151 239L242 286L473 -219L782 731Z"></path></g><rect height="0.65243" width="6.26339" x="34.1205" y="-11.0034"></rect><g transform="matrix(.013,0,0,-0.013,34.12,0)"><path d="M285 378C315 398 338 416 353 432C373 451 384 474 384 503C384 579 325 635 236 635H235C182 635 136 610 108 579L65 516L85 496C110 533 150 575 205 575C258 575 300 543 300 481C300 407 232 369 141 339L147 310C163 315 188 321 211 321C268 321 338 284 338 192C338 94 288 40 217 40C160 40 119 68 93 91C85 98 77 97 69 91C60 84 47 71 46 58C44 46 48 35 62 22C75 10 116 -12 162 -12C234 -12 424 62 424 224C424 297 373 359 285 376V378Z"></path></g></svg></span></td><td class="align_center">1,213.85</td><td class="align_center">4.05</td><td class="align_center">2.05</td><td class="align_center">7.07</td><td class="align_center">204.62</td></tr><tr><td class="align_left"><span style="width: 40.4985ptpx;"><svg height="13.8563pt" id="M215" style="vertical-align:-2.150701pt" version="1.1" viewbox="-0.0498162 -11.7056 40.4985 13.8563" width="40.4985pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M384 0V27C293 34 287 42 287 114V635C232 613 172 594 109 583V559L157 557C201 555 205 550 205 499V114C205 42 199 34 109 27V0H384Z"></path></g><g transform="matrix(.013,0,0,-0.013,6.24,0)"><path d="M456 178V225H360V632H320C217 496 115 347 20 206V178H280V106C280 40 276 34 189 27V0H445V27C364 34 360 39 360 106V178H456ZM280 225H82C149 335 214 431 278 520H280V225Z"></path></g><g transform="matrix(.013,0,0,-0.013,12.48,0)"><path d="M241 635C89 635 35 457 35 312C35 153 89 -12 240 -12C390 -12 443 166 443 312C443 466 390 635 241 635ZM238 602C329 602 354 454 354 312C354 172 330 22 240 22C152 22 124 173 124 313S148 602 238 602Z"></path></g><g transform="matrix(.013,0,0,-0.013,18.79,0)"><path d="M368 703H309L44 -163H104L368 703Z"></path></g><g transform="matrix(.013,0,0,-0.013,24.151,-1.465)"><path d="M782 731H740L476 -79H474L280 352L133 274L151 239L242 286L473 -219L782 731Z"></path></g><rect height="0.65243" width="6.26339" x="34.1205" y="-11.0034"></rect><g transform="matrix(.013,0,0,-0.013,34.12,0)"><path d="M285 378C315 398 338 416 353 432C373 451 384 474 384 503C384 579 325 635 236 635H235C182 635 136 610 108 579L65 516L85 496C110 533 150 575 205 575C258 575 300 543 300 481C300 407 232 369 141 339L147 310C163 315 188 321 211 321C268 321 338 284 338 192C338 94 288 40 217 40C160 40 119 68 93 91C85 98 77 97 69 91C60 84 47 71 46 58C44 46 48 35 62 22C75 10 116 -12 162 -12C234 -12 424 62 424 224C424 297 373 359 285 376V378Z"></path></g></svg></span></td><td class="align_center">1,215.56</td><td class="align_center">4.05</td><td class="align_center">2.05</td><td class="align_center">7.08</td><td class="align_center">205.18</td></tr><tr><td class="align_left"><span style="width: 40.4985ptpx;"><svg height="13.8563pt" id="M216" style="vertical-align:-2.150701pt" version="1.1" viewbox="-0.0498162 -11.7056 40.4985 13.8563" width="40.4985pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M384 0V27C293 34 287 42 287 114V635C232 613 172 594 109 583V559L157 557C201 555 205 550 205 499V114C205 42 199 34 109 27V0H384Z"></path></g><g transform="matrix(.013,0,0,-0.013,6.24,0)"><path d="M137 343C167 482 260 545 321 574C357 591 397 603 429 609L423 641C382 634 335 622 295 608C189 570 37 457 37 238C37 84 125 -12 242 -12C362 -12 447 89 447 209C447 311 374 393 267 393C247 393 226 386 204 376L137 343ZM227 337C318 337 361 256 361 173C361 105 336 22 258 22C176 22 126 120 126 240C126 266 127 291 132 310C155 323 189 337 227 337Z"></path></g><g transform="matrix(.013,0,0,-0.013,12.48,0)"><path d="M241 635C89 635 35 457 35 312C35 153 89 -12 240 -12C390 -12 443 166 443 312C443 466 390 635 241 635ZM238 602C329 602 354 454 354 312C354 172 330 22 240 22C152 22 124 173 124 313S148 602 238 602Z"></path></g><g transform="matrix(.013,0,0,-0.013,18.79,0)"><path d="M368 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40.4985ptpx;"><svg height="13.8563pt" id="M217" style="vertical-align:-2.150701pt" version="1.1" viewbox="-0.0498162 -11.7056 40.4985 13.8563" width="40.4985pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M384 0V27C293 34 287 42 287 114V635C232 613 172 594 109 583V559L157 557C201 555 205 550 205 499V114C205 42 199 34 109 27V0H384Z"></path></g><g transform="matrix(.013,0,0,-0.013,6.24,0)"><path d="M249 635C141 635 70 555 70 471C70 401 114 353 179 316C143 294 106 267 90 252C68 231 45 202 45 157C45 50 130 -12 237 -12C322 -12 435 52 435 169C435 256 372 304 303 343C349 374 375 398 383 407C401 429 411 458 411 487C411 569 344 635 249 635ZM238 603C285 603 337 567 337 482C337 422 310 385 276 358C205 393 145 426 145 500C145 552 179 603 238 603ZM248 20C183 20 125 70 125 163C125 218 158 268 206 300C284 261 355 217 355 143C355 66 308 20 248 20Z"></path></g><g transform="matrix(.013,0,0,-0.013,12.48,0)"><path d="M241 635C89 635 35 457 35 312C35 153 89 -12 240 -12C390 -12 443 166 443 312C443 466 390 635 241 635ZM238 602C329 602 354 454 354 312C354 172 330 22 240 22C152 22 124 173 124 313S148 602 238 602Z"></path></g><g transform="matrix(.013,0,0,-0.013,18.79,0)"><path d="M368 703H309L44 -163H104L368 703Z"></path></g><g transform="matrix(.013,0,0,-0.013,24.151,-1.465)"><path d="M782 731H740L476 -79H474L280 352L133 274L151 239L242 286L473 -219L782 731Z"></path></g><rect height="0.65243" width="6.26339" x="34.1205" y="-11.0034"></rect><g transform="matrix(.013,0,0,-0.013,34.12,0)"><path d="M285 378C315 398 338 416 353 432C373 451 384 474 384 503C384 579 325 635 236 635H235C182 635 136 610 108 579L65 516L85 496C110 533 150 575 205 575C258 575 300 543 300 481C300 407 232 369 141 339L147 310C163 315 188 321 211 321C268 321 338 284 338 192C338 94 288 40 217 40C160 40 119 68 93 91C85 98 77 97 69 91C60 84 47 71 46 58C44 46 48 35 62 22C75 10 116 -12 162 -12C234 -12 424 62 424 224C424 297 373 359 285 376V378Z"></path></g></svg></span></td><td class="align_center">1,218.62</td><td class="align_center">4.06</td><td class="align_center">2.06</td><td class="align_center">7.09</td><td class="align_center">206.21</td></tr><tr><td class="align_left"><span style="width: 40.4985ptpx;"><svg height="13.8563pt" id="M218" style="vertical-align:-2.150701pt" version="1.1" viewbox="-0.0498162 -11.7056 40.4985 13.8563" width="40.4985pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M412 140C382 77 369 73 315 73H129L270 222C362 320 402 379 402 466C402 571 322 635 234 635C177 635 130 609 99 576L42 495L64 475C90 514 133 568 201 568C274 568 318 519 318 435C318 349 255 267 193 193C144 135 87 78 32 23V0H405C417 45 427 89 440 131L412 140Z"></path></g><g transform="matrix(.013,0,0,-0.013,6.24,0)"><path d="M241 635C89 635 35 457 35 312C35 153 89 -12 240 -12C390 -12 443 166 443 312C443 466 390 635 241 635ZM238 602C329 602 354 454 354 312C354 172 330 22 240 22C152 22 124 173 124 313S148 602 238 602Z"></path></g><g transform="matrix(.013,0,0,-0.013,12.48,0)"><path d="M241 635C89 635 35 457 35 312C35 153 89 -12 240 -12C390 -12 443 166 443 312C443 466 390 635 241 635ZM238 602C329 602 354 454 354 312C354 172 330 22 240 22C152 22 124 173 124 313S148 602 238 602Z"></path></g><g transform="matrix(.013,0,0,-0.013,18.79,0)"><path d="M368 703H309L44 -163H104L368 703Z"></path></g><g transform="matrix(.013,0,0,-0.013,24.151,-1.465)"><path d="M782 731H740L476 -79H474L280 352L133 274L151 239L242 286L473 -219L782 731Z"></path></g><rect height="0.65243" width="6.26339" x="34.1205" y="-11.0034"></rect><g transform="matrix(.013,0,0,-0.013,34.12,0)"><path d="M285 378C315 398 338 416 353 432C373 451 384 474 384 503C384 579 325 635 236 635H235C182 635 136 610 108 579L65 516L85 496C110 533 150 575 205 575C258 575 300 543 300 481C300 407 232 369 141 339L147 310C163 315 188 321 211 321C268 321 338 284 338 192C338 94 288 40 217 40C160 40 119 68 93 91C85 98 77 97 69 91C60 84 47 71 46 58C44 46 48 35 62 22C75 10 116 -12 162 -12C234 -12 424 62 424 224C424 297 373 359 285 376V378Z"></path></g></svg></span></td><td class="align_center">1,220.00</td><td class="align_center">4.07</td><td class="align_center">2.07</td><td class="align_center">7.10</td><td class="align_center">206.67</td></tr><tr class="table-tr"><td colspan="6"><hr class="tbody-hr"/></td></tr></table></td></tr></table>

<div>The effect of the market risk parameter on the supply chain members’ decisions.</div>

Complexity

tab5

Table 5

Table 5: Pricing and Ordering Decisions in a Retailer Dominant Channel Involving a Third-Party Logistics Provider 