Abstract
This study considers a dual-channel supply chain which consists of one manufacturer and one retailer. The manufacturer sells product to customer through traditional channel and Internet channel respectively. According to the preference of customer, we group the product market into three parts, which is more close to the reality. The manufacturer forecasts the demand for three groups, but the actual demand is less than his expectation. We introduce a full-refund return policy and service value into model to investigate the performance of supply chain. In order to maximize their profits, manufacturer and retailer should make decisions on the pricing strategies. Through numerical simulations, we find that the return policy can effectively reduce the risk which is caused by the demand uncertainty. And the service value has two sides, which should be paying more attention on. We also derive several conclusions on the optimal sale strategy for the manufacturer and retailer in this study.
Highlights
Because of the popularity of Internet, shopping online is a new fashion for people, especially in the youth
We applied numerical simulations to analyze the influences of price sensitive coefficient, demand uncertainty and service value on the performances of two models respectively
The Return Policy model can effectively transfer some profit of supply chain from manufacturer to retailer and migrate the effects of demand uncertainty, which motivates the enthusiasm of the retailer
Summary
Because of the popularity of Internet, shopping online is a new fashion for people, especially in the youth. It occupies a large proportion of consumption pattern. More and more manufacturers gradually realize that there are lots of advantages in selling product through the Internet, which the traditional retail channel does not have. The manufacturer can reduce the middleman in the supply chain and better understanding the need of customer. The B2C mode is getting better and better. Many manufacturers set up specialty stores on the Internet and earn more market share and profit
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