Coordination Contracts of Dual-Channel Supply Chain Considering Advertising Cooperation

Abstract

To study the impact of advertising cooperation on the decisions of dual-channel supply chain, a dual-channel supply chain system consisting of a single manufacturer and a single retailer is considered. The manufacturer can sell products to customers either through a direct marketing channel or through a traditional retail channel. This paper analyses the level of advertising investment and supply chain profits of centralized and decentralized dual-channel supply chains based on a Stackelberg game. Then, the decision models of dual-channel supply chain under different contracts are constructed, and how manufacturers can optimize the profits of both sides through an effective coordination mechanism is analyzed. The research results show that the improved advertising costs and revenue sharing contract can perfectly coordinate the dual-channel supply chain system. Numerical experiments illustrate the impacts of parameters on the optimal decision results.