Research on Supply Chain Quality Decision Model Considering Reference Effect and Competition under Different Decision-Making Modes

• Published in: Sustainability 2022-08, Vol.14 (16), p.10338
• Main Authors: Jiang, Minglin, Lin, Xiaowei, Zhou, Xideng, Qiao, Hongfang
• Format: Article
• Language: English
• Subjects: Business competition; Competition; Competitive advantage; Consumers; Decision making; Differential games; Game theory; Logistics; Methods; Retail stores; Strategy; Suppliers; Supply chains; Sustainability
• ISSN: 2071-1050; 2071-1050
• DOI: 10.3390/su141610338

The reference effect of consumers’ product quality and service quality is an important behavioral factor that affects consumers’ purchase decisions. In this paper, considering the inherent dynamics of the operation mode, the two were combined into a product-service supply chain composed of a manufacturer and two competitive retailers, and the service reference effect was further divided into horizontal and vertical service reference effects. Differential game models between the manufacturer and the retailers were constructed. Using the continuous dynamic programming theory, the manufacturer’s quality level strategy, retailer’s service level strategy and supply chain system performance under the modes of no cost sharing decision, cost sharing decision and centralized decision were analyzed and compared. Main findings: The optimal strategy of product quality under centralized decision is greater than the corresponding value under cost sharing contract decision. Compared with decentralized decision making of no cost sharing, cost sharing contract cannot promote the manufacturer to improve product quality. Different from previous studies, the service quality under centralized decision making is not higher than other decisions. When the horizontal reference effect of service quality meets a certain condition, the supply chain profit under centralized decision making is lower than the corresponding value under decentralized decision making.