Optimal pricing decisions in a fuzzy dual-channel supply chain

This paper analyzes the pricing decisions of a dual-channel supply chain including one retailer and one manufacturer who produces a product and sells it to the end customer through retailer or directly. Both the manufacturing cost and the customer demand are considered as fuzzy variables. Two pricing models, including centralized decision model and manufacturer-leader Stackelberg game, with consideration of different market power structures are adopted. Optimal decisions on wholesale price and retail prices are determined using game theoretical approach and fuzzy set theory for each model. Finally, a numerical example is solved to illustrate the effectiveness of models and provide some managerial insights from analysis.