Profit-maximization models with price-only contracts in vendor Stackelberg electronic markets

The paper studies the performances of the decentralized channels under electronic markets (EM) and traditional markets (TM), while selling a perishable product with multivariate demand function. We provide optimal dynamic decisions, including the retail price, wholesale price, and replenishment quantity/scheduling, in a single-vendor Stackelberg and single-buyer channel with price-only contracts under TM and EM, respectively, over a multi-period planning horizon, so that the profits are maximized. The numerical results show that the solutions generated by the EM outperforms those by the TM in the profits of the channel, buyer, and vendor, and then channel Pareto improvements can be achieved.