In:
International Transactions in Operational Research, Wiley, Vol. 28, No. 2 ( 2021-03), p. 1018-1045
Abstract:
Many retailers and manufacturers issue “free” gift cards to consumers who purchase qualifying products. These gift cards are paid for by the retailer or manufacturer and redeemed on certain products at the retailer. We develop a decentralized two‐product supply chain in which the retailer is a Stackelberg leader. We analyze three models: no gift cards, manufacturer‐sponsored gift cards, and retailer‐sponsored gift cards. By comparing these three models, we show that offering retail‐sponsored gift cards is the optimal strategy in such a supply chain. We analyze the influences of product value and redemption rate on the optimal policy and the expected profits. We show that the retailer, two manufacturers, and consumers are better off in such an optimal strategy. Furthermore, we develop a cost‐sharing mechanism based on the result of retailer‐sponsored gift cards by taking reasonableness and fairness into consideration. Finally, we extend our study by considering changed wholesale prices and retailer prices and a pair of complements with gift cards in the models of manufacturer‐sponsored gift cards and retailer‐sponsored gift cards, and we obtain some useful insights.
Type of Medium:
Online Resource
ISSN:
0969-6016
,
1475-3995
Language:
English
Publisher:
Wiley
Publication Date:
2021
detail.hit.zdb_id:
2019815-2
SSG:
3,2
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