Pricing and AI technology adoption decisions in a competitive supply chain network
Author
Faculty Advisor
Date
2025
Keywords
supply chain network management, technology adoption, variational inequalities, network equilibrium model
Abstract (summary)
This paper develops an equilibrium model to investigate pricing and technology upgrade decisions in the context of supply chain versus supply chain competition. The model considers a two-echelon supply chain where manufacturers and retailers make decisions on pricing, output, and artificial intelligence technology upgrades. Demand is influenced by both price and service level, and technology upgrades implicitly enhance customer utility by improving the service level. These interdependencies across the supply chain significantly impact overall profitability. Consequently, pricing and technology upgrade decisions must be optimized collectively rather than in isolation. Three key features of this model are highlighted: First, our model is built upon the context of supply chain versus supply chain competition, rather than the context of firm versus firm competition. Second, it integrates pricing and technology upgrade decisions to enhance the overall performance of a supply chain network. The interplay between pricing strategies, technological advancements, and customer utility is analyzed to improve supply chain efficiency and competitiveness. Third, the model assumes that heterogeneous customers are sensitive to both price and service level, with technology upgrades playing a pivotal role in shaping customer preferences. We utilize variational inequalities to characterize the equilibrium conditions of the supply chain, enabling robust analysis and decision-making. This study provides a novel framework for understanding pricing and technology upgrade strategies in a competitive supply chain network, offering actionable insights for decision-makers seeking to optimize supply chain performance and enhance customer satisfaction in competitive markets.
Publication Information
Ma, J., Dong, J., & Tu, Y. (2025). Pricing and AI technology adoption decisions in a competitive supply chain network. In M. Chi & Y. P. Tu (Eds.), E-Business. Generative artificial intelligence and management transformation (pp. 349–360). Springer. https://doi.org/10.1007/978-3-031-94187-0_29
Notes
Item Type
Article
Language
Rights
All Rights Reserved