Optimal Pricing, Green Advertising Effort and Advanced Technology Investment

What is it about?

This article applies a multimethodological approach to study a marketing and operations management interface problem in fashion supply chain management. This article first conducts a case study to reveal how a fashion supplier can adopt advanced technologies to commit sustainability in real-world practice. Then, a Stackelberg game is built to analyze the optimal pricing, advertising level, and sustainable technology investment decisions for a supply chain with environmentally conscious consumers. It is found that the optimal wholesale price is dependent on the supplier’s production cost but independent of technology cost rate and promotion cost rate. There are three situations that the supplier will commit a higher sustainability level. Specifically, the supplier has either a higher production cost or a higher technology cost rate will result in a higher sustainability level. In addition, when the retailer’s promotion cost rate increases, supplier will react by having a higher sustainable commitment level if her technology cost rate is significantly large.

Featured Image

Photo by Sarah Dorweiler on Unsplash

Photo by Sarah Dorweiler on Unsplash

Why is it important?

Sustainable Fashion Supply Chain Management

Perspectives