Dynamic Price and Quantity Postponement Strategies

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Author(s): Yohanes Kristianto (University of Vaasa, Finland)
Copyright: 2012
Pages: 14
Source title: Information Technologies, Methods, and Techniques of Supply Chain Management
Source Author(s)/Editor(s): John Wang (Montclair State University, USA)
DOI: 10.4018/978-1-4666-0918-1.ch010

Keywords: Business & Management / Business Information Systems / Business Science Reference / Supply Chain Management

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Abstract

This paper studies duopolistic competition under dynamic price and production quantity postponement for two differentiable products, which share common components from one supplier at a certain degree of substitution. Both price and quantity postponement is benchmarked according to the Bertrand and Cournot Stackelberg game. In addition, system dynamic is applied to show the long term effect of both strategic decisions (price and production quantity) on profit and against demand uncertainty. The results show that price postponement is appropriate for high modular products (make-to-stock) and production quantity postponement for special orders (make-to-order). The final part of the paper concludes with results and outlines future research directions.

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