Abstract: The manufacturer's suggested retail price as consumer's reference price is introduced into the supply chain system for describing its effects on pricing strategic of supply chain. This system is studied by game theory and it is found that while the manufacturer's suggested retail price is low, the retailer will offer a lowest reference price strategy; while the manufacturer's suggested retail price is high, the retailer will offer a highest reference price strategy; while the manufacturer's suggested retail price is medium, the retailer will offer a resale price maintenance strategy. Based on these, the effects of the relevant parameters on the three strategies, as well as the differences among them, are analyzed. The results indicate that: both the lowest or highest reference price strategy could maximize the manufacturer's profit, the condition of choice is also given. Finally, the profits of supply chain system under different strategies are compared by numerical analysis, the results showed that the profits of system with the highest reference price strategy is optimal. The conclusions of this paper offer a theoretical reference for the decision of manufacturer's suggested retail price.

Key words: manufacturer's suggested retail price, reference effect, loss averse, pricing strategy