Title

Predictive Modeling Of Sulfide Removal In Tray Aerators

Keywords

And subsidy rate; Co-Op advertising; Marketing channels; Stackelberg differential games

Abstract

We study a supply chain in which a consumer goods manufacturer sells its product through a retailer. The retailer undertakes promotional expenditures, such as advertising, to increase sales and to compete against other retailer(s). The manufacturer supports the retailer's promotional expenditure through a cooperative advertising program by reimbursing a portion (called the subsidy rate) of the retailer's promotional expenditure. To determine the subsidy rate, we formulate a Stackelberg differential game between the manufacturer and the retailer, and a Nash differential subgame between the retailer and the competing retailer(s). We derive the optimal feedback promotional expenditures of the retailers and the optimal feedback subsidy rate of the manufacturer, and show how they are influenced by market parameters. An important finding is that the manufacturer should support its retailer only when a subsidy threshold is crossed. The impact of competition on this threshold is nonmonotone. Specifically, the manufacturer offers more support when its retailer competes with one other retailer but its support starts decreasing with the presence of additional retailers. In the case where the manufacturer sells through all retailers, we show under certain assumptions that it should support only one dominant retailer. We also describe how we can incorporate retail price competition into the model. © 2012 The Authors Decision Sciences Journal © 2012 Decision Sciences Institute.

Publication Date

2-1-2012

Publication Title

Journal - American Water Works Association

Volume

104

Issue

1

Number of Pages

53-54

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.5942/jawwa.2012.104.0027

Socpus ID

84865675131 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/84865675131

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