Pricing and lead time joint decisions in two-echelon supply chain with retailers´ competition

A two-echelon supply chain consisting of a manufacturer and two competitive retailers is investigated in this paper. A joint pricing and delivery lead time decision model facing price- and lead time sensitivity demands was established, and then optimal decisions policies for pricing and planned lead time were given. Next, decision efficiency of the decentralized supply chain was examined using the performance of the corresponding centralized system as a benchmark. Finally, numerical examples were used to analyze impacts of price-sensitivity, lead time sensitivity, and channel competition sensitivity on the decision efficiency of the supply chain system, and results show that the competition between downstream channels not only contributes to improve the decision efficiency of the decentralized system but to shorten the planned delivery lead time so that the competence of the whole supply chain in the market will correspondingly upgraded.