Pricing Policy for Supply Chain in the Electronic Commerce Environment

This paper presents a model for designing the pricing policies for the supply chain whose channel is integrated with retail and e-tail. In order to incentive the retailer, the manufacture in the supply chain adopts return policy promising that any unsold product can be returned to the manufacture for a partial refund in the end of the selling season. How can the manufacture coordinate the pricing policy between the retail and e-tail channel and what is the optimal pricing policy for the wholesale price and return policy which will make the supply chain’s profit maximize are the central issue in the supply chain coordination. Pricing policies between retail and e-tail are researched under the Stackelberg price competition model firstly. Under the optimal competing pricing policies model, we further obtain the equilibrium pricing for the wholesale and return price that make the supply chain maximize through the expected profit analysis. Then further research dimensions are discussed in the end of the paper.