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We develop a price competition model for a new supply chain that competes in a market comprised of some rival supply chains. The new supply chain has one risk-neutral manufacturer and one risk-averse retailer in which the manufacturer is a leader and retailer is a follower. The manufacturer pays a fraction of the risk cost (caused by demand uncertainty) to the retailer. We apply this competitive model to a real-world case in a supply chain under uncertain environment and obtain the optimal wholesale and retail prices. We show that our obtained prices are better than the existing wholesale and retail prices and admit more profits for both manufacturer and retailer and generally for the entire supply chain. Also, using this case, the effects of risk sensitivity of retailer and fraction of risk cost shared by manufacturer in the total risk cost on the new supply chain’s optimal wholesale and retail prices and profits are illustrated.

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Nowadays, airline industries should overcome different barriers regarding the fierce competition and changing consumer behavior. Thus, they attempt to focus on joint decision making which enables them to set pricing and capacity allocation to maximize their profits. In this research, we develop a model to optimize pricing and capacity allocation in a duopoly of single-flight leg for two competitive airlines. The problem considers actual assumptions about flexible partitions in flight’s cabins and additionally demand uncertainty. There is a flexible partitioning of business and economy cabins and demand is assumed price-dependent with additive uncertainty. The capacity and pricing decisions are simultaneously determined through indirect channels. Moreover, a numerical study is developed to investigate how market components and competition conditions change pricing, capacity, and profit levels. The results show that increasing market volume like decreasing price sensitivity provides higher levels of price and profits. Moreover, intensified competition never leads to higher prices. Thus, a competitive network of airlines provides better impact on market mechanism to achieve competitive prices for both economy and business classes.