Dual-channel supply chain coordination model based on seasonal compensation

Abstract

As fierce competition of market and rapid development of E-commerce, more and more companies have started to open a direct channel besides an existing retail channel. The performance of dual-channel, the choice of channel, channel conflict and channel coordination have been focused on. Based on the analysis of non-cooperative dual-channel supply chain coordination, the paper brings up dual-channel supply chain coordination model based on seasonal compensation. In cooperative dual-channel supply chain, when out of stock in direct channel, excess inventory of various retailers can be transshipped to direct channel according to coordination strategy. In this paper, cooperative dual-channel supply chain transshipment model was built to analyze optimal transshipment and coordination strategy. Study results showed that when coordinated, the profit of cooperative dual-channel supply chain is greater than non-cooperative's while the rate of out of stock decreases. So strategy of dual-channel supply chain coordination model based on seasonal compensation is able to enhance the supply-demand match and increase profit of the supply chain.