Abstract
With the rapid development of contemporary e-commerce, there are now multiple sales channels in the supply chain. At the same time, frequent natural disasters, terrorist attacks, and economic disasters have increased the risks from disruptions in supply chain transportation. Cargo transportation insurance is an important tool for managing transportation disruptions in the supply chain. Based on a secondary supply chain, this paper analyzes an expected profit model for a manufacturer's decision, in a dual-channel supply chain, to purchase cargo transportation insurance against transport disruptions. It explores the impact of manufacturers with insurance on the expected profits in the supply chain. The research reveals that cargo transportation insurance can effectively reduce losses caused by transportation disruptions. In addition, the results show that, if transportation insurance is purchased and the possibility of transportation disruption exists in both channels, the total profit of the supply chain under decentralized decision is higher than its profit under centralized decision.
Highlights
With the maturation of internet technology, e-commerce has grown tremendously
This article established the relevant theoretical basis for supply chain risk management, cargo transportation insurance, and dual-channels. It constructed a transportation disruption model for dual-channel supply chains and discussed differences in supply chain profits, with different forms of channel disruptions, under centralized and decentralized decision models. It studied the profit of the supply chain when channel disruptions occurred under centralized decision
It discussed the impact of cargo transportation insurance on the sales price, retailer’s order quantity, direct sales volume, and total profit of the supply chain
Summary
With the maturation of internet technology, e-commerce has grown tremendously. The emergence of e-commerce platforms has enriched consumers’ shopping channels and created great value. This paper introduces cargo transportation insurance into a dual-channel supply chain environment, and establishes a dual-channel supply chain model with the risk of transportation disruption It explores the impact of manufacturers with insurance on the expected profits in the supply chain and discusses differences in supply chain profits, with different forms of channel disruptions, under centralized and decentralized decision models. It finds a theoretical basis for applying cargo transportation insurance to enterprise and supply chain risk management.
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