Pricing and Channel Coordination in Online-to-Offline Supply Chain Considering Corporate Environmental Responsibility and Lateral Inventory Transshipment

Abstract

In this study, we investigate pricing policy and coordination conditions in an online-to-offline supply chain considering corporate environmental responsibility and lateral inventory transshipment. First, we provide demand functions to capture effects of price, corporate environmental responsibility level, and preference degree of the consumer to online channel. Then, we build profit functions and develop three joint pricing and corporate environmental responsibility-level decision models for centralized decision (Scenario CD), retailer Stackelberg game (Scenario RS), and manufacturer Stackelberg game (Scenario MS). Furthermore, we determine the optimal decision policies by solving developed models, and conduct sensitivity analysis of significant factors. Finally, we use a revenue-sharing contract to realize supply chain coordination and find coordination conditions for Scenario RS and MS, and further show the impacts of revenue-sharing rate and investment cost sensitivity on the conditions using numerical studies. We find that optimal joint decision policies can be affected by significant factors to a varying degree. In certain conditions, the revenue-sharing contract can coordinate online-to-offline supply chains considering corporate environmental responsibility and lateral inventory transshipment. Our study proposes a new decision problem, constructs new joint decision models, determines new optimal joint policies, conducts new coordination analysis, and thus contributes to the research on supply chain operations considering corporate environmental responsibility and lateral inventory transshipment.