Research on the Dynamic Pricing and Capacity Allocation Decisions of a Two-Period Supply Chain: Considering Supply–Demand Imbalance

In order to improve the sustainability of manufacturing enterprises and solve the problem of “excess production capacity in the off-season and insufficient production capacity in the busy season”, this study investigates the optimal practices for supply chain dynamic pricing and capacity co-ordination when there are differences in product cost and product demand during nonbusy seasons, and it proposes the optimal capacity decision-making method for manufacturers. The results show the following: (1) A manufacturer in a high-capacity state has lots of excess capacity, so no strategic inventory co-ordination is required. (2) When a manufacturer is in a medium-capacity state, it can co-ordinate the production capacity in the nonbusy season through capacity allocation, achieve balanced production scheduling, and improve the sustainability of the manufacturer’s operation; the lower the manufacturer’s capacity, the higher the manufacturer’s strategic inventory quantity. (3) When the manufacturer is in a state of low capacity, the manufacturer uses all production capacity but still cannot satisfy off-season and busy season demand at the same time; the manufacturer will reduce product demand by increasing product prices and according to the unit product marginal income of the decision-making capacity allocation in the nonbusy season, the distribution ratio is related to the manufacturer’s capacity and product parameters. (4) Three optimal production capacity decision schemes for manufacturers under different production costs and inventory costs are obtained.

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Publication Details

Journal
Sustainability
Published
2024-11-27
DOI
https://doi.org/10.3390/su162310397
Citations
1
Primary Topic
Supply Chain and Inventory Management
Type
article
Field-Weighted Citation Impact
0.53

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article

Research on the Dynamic Pricing and Capacity Allocation Decisions of a Two-Period Supply Chain: Considering Supply–Demand Imbalance

Wen‐Tzong Liang, Xiu-Xia Yan, Hongfei Wang
1 citations
Sustainability
Supply Chain and Inventory Management
0.53
article

Research on the Dynamic Pricing and Capacity Allocation Decisions of a Two-Period Supply Chain: Considering Supply–Demand Imbalance

Wen‐Tzong Liang, Xiu-Xia Yan, Hongfei Wang
article en
1 citations

Abstract

In order to improve the sustainability of manufacturing enterprises and solve the problem of “excess production capacity in the off-season and insufficient production capacity in the busy season”, this study investigates the optimal practices for supply chain dynamic pricing and capacity co-ordination when there are differences in product cost and product demand during nonbusy seasons, and it proposes the optimal capacity decision-making method for manufacturers. The results show the following: (1) A manufacturer in a high-capacity state has lots of excess capacity, so no strategic inventory co-ordination is required. (2) When a manufacturer is in a medium-capacity state, it can co-ordinate the production capacity in the nonbusy season through capacity allocation, achieve balanced production scheduling, and improve the sustainability of the manufacturer’s operation; the lower the manufacturer’s capacity, the higher the manufacturer’s strategic inventory quantity. (3) When the manufacturer is in a state of low capacity, the manufacturer uses all production capacity but still cannot satisfy off-season and busy season demand at the same time; the manufacturer will reduce product demand by increasing product prices and according to the unit product marginal income of the decision-making capacity allocation in the nonbusy season, the distribution ratio is related to the manufacturer’s capacity and product parameters. (4) Three optimal production capacity decision schemes for manufacturers under different production costs and inventory costs are obtained.

SustainabilityVol. 16(23)
Shandong University of Technology (CN)
National Social Science Fund of China
Openalex Percentile: Top 24%
Supply Chain and Inventory Management
0.53
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Research on the Dynamic Pricing and Capacity Allocation Decisions of a Two-Period Supply Chain: Considering Supply–Demand Imbalance — Wen‐Tzong Liang, Xiu-Xia Yan, et al. · Sustainability (2024) | TGRS Research Map | TGRS