Robust Pricing for a Dual-Channel Green Supply Chain Under Fuzzy Demand Ambiguity

The pricing decision is a fundamental problem in a two-echelon dual-channel supply chain, and it is a challenging issue to get the optimal pricing strategy due to high demand ambiguity. Although this problem has been studied by many researchers, the market demand is usually assumed to be deterministic or described as a fuzzy variable with exact distribution information in most of the existing literature. In this article, the uncertain demand is assumed to possess fuzzy uncertainty instead of stochastic nature. In the case that the demand distribution information is partially available, this article proposes a new uncertainty distribution set to depict the demand distribution uncertainty based on the type-2 fuzzy theory. Then, a novel robust pricing game modeling framework is developed for the dual-channel green supply chain with the demand distribution varying in the proposed uncertainty distribution set. Finally, a new method is proposed for obtaining the robust equilibrium decisions of supply chain members. Numerical analysis and comparisons are conducted to demonstrate the impacts of the demand ambiguity on the manufacturer’s equilibrium channel choice strategy. We also demonstrate that our solution results are robust in the setting that the prices of the green products are not equal in the retail and the direct channels.