The Complexity and Entropy Analysis for Service Game Model Based on Different Expectations and Optimal Pricing

Abstract

The internet has provided a new means for manufacturers to reach consumers. On the background of the widespread multichannel sales in China, based on a literature review of the service game and multichannel supply chain, this paper builds a multichannel dynamic service game model where the retailer operates an offline channel and the manufacturer operates an online channel and offers customers the option to buy online and pick up from the retailer’s store (BOPS). The manufacturer and the retailer take maximizing the channel profits as their business objectives and make channel service game under optimal pricing. We carry on theoretical analysis of the model and perform numerical simulations from the perspective of entropy theory, game theory, and chaotic dynamics. The results show that the stability of the system will weaken with the increase in service elasticity coefficient and that it is unaffected by the feedback parameter adjustment of the retailer. The BOPS channel strengthens the cooperation between the manufacturer and the retailer and moderates the conflict between the online and the offline channels. The system will go into chaotic state and cause the system’s entropy to increase when the manufacturer adjusts his/her service decision quickly. In a chaotic state, the system is sensitive to initial conditions and service input is difficult to predict; the manufacturer and retailer need more additional information to make the system clear or use the method of feedback control to delay or eliminate the occurrence of chaos.

Keywords

• multichannel supply chain
• service game
• chaos
• entropy
• BOPS