Maximising manufacturer's profit in a dual-channel supply chain with disruption risk

Abstract

With the rapid development of the e-commerce, more customer demands are generated through online sales channels. Together with traditional sales channels through retailers, the manufacturers need to implement the dual supply chain management to enhance their performance. However, both of the online and traditional sales channels might face various sources of disruption risks under the globalisation and the high complexity of the supply chain network. Using a theoretical modelling approach, three industrial cases, and sensitivity analysis, we discuss the optimal pricing strategy of manufacturer in the dual channel supply chain with disruption risks. We find that the influential factors of maximising profits of a manufacturer include its pricing strategy, product market share, disruption risk probabilities, and product distribution proportion between the online and offline channels.