|
Abstract In a supply chain consisting of a responsible supplier, an irresponsible supplier, one manufacturer, and two types of consumers, and considering sole sourcing and heterogeneity of customers’ willingness to pay, this study investigates the manufacturer’s optimal decision of sourcing, target market selection and pricing. Results show that the manufacturer’s sourcing strategy depends on the maximum of customers’ willingness to pay and the difference of sourcing costs from two heterogeneous suppliers. However, the target market selection and pricing strategies only depend on the maximum of customers’ willingness to pay. As the maximum of customers’ willingness to pay increases, the manufacturer prefers responsible sourcing, but as the difference of sourcing costs increases, the irresponsible sourcing is preferred. In the mode of responsible sourcing, when the maximum of customers’ willingness to pay is small, price discrimination in mass market is optimal, however, when the maximum of customers’ willingness to pay is large, extension pricing strategy in mass market is optimal.
|
|
Received: 27 December 2016
|
|
|
|
