TY - JOUR
T1 - Category management under non-symmetric demands
AU - Sheen, Gwo Ji
AU - Nguyen, Anh H.G.
AU - Yeh, Yingchieh
N1 - Publisher Copyright:
© 2021 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2022
Y1 - 2022
N2 - Category management is known as a strategic approach that can enhance the collaboration between retailers and manufacturers in a supply chain. In this study, we examine two category management scenarios, Retailer Category Management (RCM) and Category Captainship (CC), for a two-stage supply chain in which two manufacturers sell their substitutable products through a common retailer. Based on non-symmetric demand functions, we develop two mathematical models in which the retailer adopts RCM and CC. By comparing these two models’ equilibrium outcomes, the following insights are found. First, the optimal policy for shelf space allocation and pricing decisions are obtained. Second, we indicate three situations under which competitive exclusion does not exist. This supports decisions on whether to switch from RCM to CC. Third, our analysis shows the evidence to support the retailer on choosing the category captain regarding either the retailer's join profit gain or the competitive exclusion. Last, we highlight the various conditions under which the retailer has either low or high flexibility in choosing products for the category, when the competitive exclusion is concerned. Our model is the first to illustrate the interaction impact of non-symmetric market potential, non-symmetric own-price elasticity and cross-price sensitivity on category management.
AB - Category management is known as a strategic approach that can enhance the collaboration between retailers and manufacturers in a supply chain. In this study, we examine two category management scenarios, Retailer Category Management (RCM) and Category Captainship (CC), for a two-stage supply chain in which two manufacturers sell their substitutable products through a common retailer. Based on non-symmetric demand functions, we develop two mathematical models in which the retailer adopts RCM and CC. By comparing these two models’ equilibrium outcomes, the following insights are found. First, the optimal policy for shelf space allocation and pricing decisions are obtained. Second, we indicate three situations under which competitive exclusion does not exist. This supports decisions on whether to switch from RCM to CC. Third, our analysis shows the evidence to support the retailer on choosing the category captain regarding either the retailer's join profit gain or the competitive exclusion. Last, we highlight the various conditions under which the retailer has either low or high flexibility in choosing products for the category, when the competitive exclusion is concerned. Our model is the first to illustrate the interaction impact of non-symmetric market potential, non-symmetric own-price elasticity and cross-price sensitivity on category management.
KW - Category management
KW - category captainship
KW - limited shelf space
KW - non-symmetric demands
KW - two-stage supply chain
UR - http://www.scopus.com/inward/record.url?scp=85111464990&partnerID=8YFLogxK
U2 - 10.1080/23302674.2021.1951884
DO - 10.1080/23302674.2021.1951884
M3 - 期刊論文
AN - SCOPUS:85111464990
SN - 2330-2674
VL - 9
SP - 569
EP - 596
JO - International Journal of Systems Science: Operations and Logistics
JF - International Journal of Systems Science: Operations and Logistics
IS - 4
ER -