A DYNAMIC CO-OP MODEL FOR A “TWO MANUFACTURER-SINGLE RETAILER” SUPPLY CHAIN

摘要

Cooperative advertising is a common cooperative approach between manufacturers and retailers. Previous literature of cooperative advertising mainly focus on “ single-manufacturer and single -retailer”, whereas few of them focus on "single-manufacturer and multi-retailers”. Due to the increasing market power of retailers, the competition between manufacturers becomes more and more intense, and the decision-making framework of multi-manufacturers and single-retailer is becoming more realistic. In view of these, three typical situations based on the framework of “two-manufacturers and single-retailer” are discussed in this paper, i.e., (i) the two manufacturers and the retailer make decisions independently, (ii) the retailer is vertically integrated with one manufacturer, and (iii) the two manufacturers are integrated horizontally. Utilizing the differential game theory, the optimal advertising levels for each stage of the system are calculated and compared for the three different situations.