Abstract
Focusing on dual-channel supply chain involving both traditional channel and e-commerce channel, this paper analyses the supply chain decision in retailer drop shipping and manufacturer drop shipping, explores the conditions for the manufacturer and the retailer to select retailer drop shipping, and identifies their cooperative strategies in retailer drop shipping. The results show that the cooperative interval of drop shipping commission will expand with the increase in the market share of e-commerce channel, and vice versa. However, the expansion or shrink of the market capacity does not necessarily lead to increase or decrease in the drop shipping commission.
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