Decision analysis and coordination of dual supply chain with retailer's offline return service and online reviews

Abstract

Based on the centralized and decentralized decision‐making cases, this study constructs a dual‐channel supply chain game model that considers offline return service and online reviews, and explores the pricing decisions and benefits of supply chains under the dual influence of return service level and online reviews. The impact of return rate, return service level and perceived quality of online reviews on optimal supply chain decisions and profits are further analyzed. Finally, considering the phenomenon of double marginalization in the supply chain, this study coordinates the supply chain based on the benefit‐sharing contract coordination model to achieve Pareto improvement. The research shows that: The manufacturer's optimal wholesale price, the optimal online selling price and the retailer's optimal offline price are positively correlated with the perceived quality of online reviews and the level of return service. Compared with the return service level, the perceived quality of online reviews has a greater impact on the overall profit of the supply chain. Under the dual influence of the perceived quality of online reviews and the level of return service, the supply chain profit in the centralized model is better than that in the decentralized model. The coordination model can effectively coordinate the supply chain. Moreover, when the sharing ratio of manufacturers is obviously lower than that of retailers, the coordination effect is better at this time.