Coordination Of Dual-channel Supply Chain Research Articles

Dual-Channel Supply Chain Coordination Considering the Consumer’s Perception of Quality

Dual-Channel Supply Chain Coordination Considering the Consumer’s Perception of Quality

Channel Competition and Coordination of a Dual-Channel Supply Chain under Interval Demand

Interval demand is becoming more common than ever before, since the variation bounds of uncertain demand are only required in practice, and they could be obtained through only a small amount of uncertain information. The goal of this paper is to analyze the optimal decision and coordination of a competitive dual-channel supply chain under an interval uncertain demand. For this purpose, we establish a centralized decision model and a wholesale price contract model under both interval demand and channel competition, respectively. Meanwhile, both the satisfaction degree of interval and the order relation of interval number are proposed to convert interval uncertain optimization problems to deterministic ones. Then, we derive the optimal pricing decisions, ordering quantities, and performances of partners and the supply chain system. Meanwhile, a revenue sharing contract is proposed to coordinate the competitive dual-channel supply chain under interval demand. Moreover, we found that the bounds of interval demand and channel sensitivities affect the optimal strategies and revenue sharing contract under interval uncertainty. Finally, we present a numerical analysis to illustrate the proposed results in this paper and conduct sensitivity analyses. The findings of this paper provide important references for decision makers and managers to make scientific decisions in an interval uncertain environment.

Dual-channel supply chain coordination with online reviews

The strategic interactions of consumers and supply chain (SC) players are significantly influenced by online reviews. This study develops centralized and decentralized dual-channel SC game models with one manufacturer and one retailer, and explores the impacts of online reviews on the manufacturer’s channel strategies and SC coordination. The following conclusions were drawn: First, when online reviews are sufficiently favorable, the manufacturer chooses a dual-channel strategy under a centralized model. In the decentralized model, the manufacturer’s optimal channel strategy depends on the joint effects of online reviews and customers’ channel preference. As more consumers prefer the direct channel with online reviews, the dominance interval of the dual channel strategy widens. A higher review accuracy, on the other hand, may not be enough to incentivize a manufacturer to choose the dual channel strategy. Second, the dual channel mode can effectively improve SC efficiency only when online reviews are sufficiently favorable to the manufacturer and consumers’ acceptance of the direct channel is low. Third, we propose a revenue-sharing contract with a fixed transfer payment that can fully coordinate a dual-channel SC in the presence of online reviews. Our findings not only complement the dual-channel SC literature but also provide insights into how manufacturers can use online reviews to drive marketing strategies and design dual-channel SC coordinating contracts.

Dual-Channel Supply Chain Coordination with Loss-Averse Consumers

Most studies on supply chain coordination assume that consumers are rational. However, with the development of e-commerce, consumer-bounded rationality has become an important issue with respect to supply chain coordination. Based on the assumption that some consumers are loyal to the offline shop and others are reference-dependent, this article examines the mechanism of vertical restraints and their competitive effects. This research study found that compared with the assumption of rational consumers used in previous literature, vertical restraints help internalize the “channel price gap externality” when consumers are loss averse. When separately operating, the offline shop will set a higher price due to its consumers’ higher loyalty and willingness to pay. However, given the positive externality of this price to the online retail sales, the offline price is still lower than the level under vertical integration. When the upstream manufacturer achieves supply chain coordination with vertical restraint contracts, the channel price gap externality is internalized, and the channel price gap expands to stimulate loss-averse consumers’ purchasing decisions.

Coordination of dual-channel supply chain considering differential pricing and loss-aversion based on quality control

<p style='text-indent:20px;'>This paper investigates the coordination of dual-channel supply chain under quality control with a loss-averse manufacturer and a loss-averse retailer. Facing various uncertain factors, supply chain members tend to show loss aversion, which makes their actual decision deviate from the optimal decision without considering loss aversion. Therefore, the loss aversion effect function is applied to characterize the loss aversion of members. Besides, under quality control, utility model is constructed under centralized decision and decentralized decision, and the optimal decisions are solved according to the principle of utility maximization. Further, by analyzing and comparing the optimal strategies of two typical decision structures, the wholesale price and the quality cost-sharing contract is designed to coordinate the dual-channel supply chain, and the contract is proved to be valid. Finally, the impacts of the parameters change on the optimal quality level and order price are presented through the sensitivity analysis. It is found that quality control strategy and loss aversion degree of supply chain members affect the setting of coordination contract parameters and utility of supply chain. Moreover, the coordination of dual-channel supply chain is conducive to improving the level of product quality and reducing the price difference between channels.</p>

Dual-channel supply chain coordination strategies considering electricity quality

<p style='text-indent:20px;'>The introduction of tradable electricity platforms in China has enriched the channels for consumers to purchase electricity and intensified the competition among channels. The quality of electricity is an essential factor affecting consumer purchasing behavior. This paper mainly focuses on the influence of the competition among channels on electricity quality.We construct a dual-channel electricity supply chain, in which electricity generators sell electricity directly to consumers or resell it through electricity retailers. We use the backward induction method of game theory to solve the equilibrium solutions in centralized, decentralized, and coordinated decisions. By analyzing and comparing the equilibrium solutions, we draw the following conclusions; (1) Electricity quality, electricity price, electricity demand, and profits increase with the sensitivity coefficient of electricity quality and price competition coefficient. (2) Electricity quality, electricity price, electricity demand, and profits decrease with the investment cost coefficient of quality improvement. (3) The increase in transmission and distribution costs reduces the electricity quality while increasing the electricity price through both channels. Furthermore, the increase leads to an increase in electricity demand and the profit of the electricity retailer through the resale channel. However, it reduces the electricity demand and the profit of the electricity generator through the direct sales channel. (4) A combined contract consisting of revenue sharing and quality improvement investment cost-sharing can lead to coordination.</p>

Game-theoretic analysis of a two-stage dual-channel supply chain coordination in the presence of market segmentation and price discounts

Advance selling can lock in consumers and cannibalize discount-sensitive consumers from the regular selling stage, which has become a common strategy for manufacturer-led dual-channel supply chains. Consumers order or purchase goods in two stages including advance selling and regular selling, based on their offline and online market segmentations. This study employs a Stackelberg game approach to characterize centralized and decentralized models considering market segmentation and price discounts. We find that the manufacturer can obtain maximum equilibrium profit in advance selling by indirectly and purposefully guiding lock-in consumers in regular selling to purchase goods through the offline market, and subsequently can avoid minimum equilibrium profit in regular selling by directly and purposefully guiding lock-in consumers in regular selling to purchase goods through the offline market. However, the retailer can obtain the maximum equilibrium profits in both stages. Furthermore, for exogenous price discounts, the manufacturer and retailer formulate pricing strategies that adhere to existing market rules. For endogenous price discounts, pursuing a low price-discount strategy should be avoided. Cooperation between both players can always generate more profits under regular selling, but not under advance selling. A two-part tariff contract is proposed to achieve cooperation. The results show that by adjusting a lump-sum fee, players can smoothly implement the two-part tariff contract. Three extensions demonstrate that cannibalizing discount-sensitive consumers does not always result in higher profits for the manufacturer or retailer.

Dual-channel supply chain coordination considering credit sales competition

Credit sales not only help sellers expand sale size and promote competitiveness, but also relieve the pressure of customers cash flow, but inevitably increases channel conflict and generates capital opportunity cost. This article attempts to consider a dual-channel supply chain operation decision and coordination under credit sales transactions for the first time, in which the supplier and the retailer compete on the credit period provided to the final customers, and the market demand is random and depends on credit period. This paper develops and analyzes the mathematical models of the dual-channel supply chain expected profit maximization under centralized, decentralized and coordinated decision making structures. A decision framework for a dual-channel supply chain considering credit sales competition and random demand is given, in which the supplier decides on wholesale price and online direct sales channel credit period, and the retailer decides on traditional retail channel credit period. This study finds that the fierce credit sales competition is bad for the dual-channel supply chain, and classical coordination contracts such as wholesale price joint trade credit contract have limitations in the dual-channel supply chain coordination considering credit sales competition. To stimulate channel members to make optimal decisions while optimizing their expected profits, a two-part credit contract based on asymmetric Nash bargaining is proposed. The research results reveal that the proposed contract can not only achieve the dual-channel supply chain coordination considering credit sales competition, but also achieve Pareto improvements of all members. Finally, the performance of different models is compared by numerical examples and sensitivity analyses, the effectiveness of the proposed contract is proved, and some managerial insights are given.

Composite Contracts for Dual-Channel Supply Chain Coordination with the Existence of Service Free Riding

This paper aims to investigate how to coordinate a dual-channel supply chain composing of a manufacturer and a retailer when customers utilize the retailer’s service to conduct free-riding behavior. Specially, we consider the crucial role of service in affecting customers’ valuation for a kind of experience product and establish a channel choice model by employing utility theory. Then, we analyze the optimal pricing and service decisions under decentralized and centralized scenarios. To achieve overall optimization, we propose three contract mechanisms, namely price hike (Mechanism 1), price hike with service cost sharing (Mechanism 2) and price hike with service cost sharing and surplus compensation (Mechanism 3). We reveal the way of price difference and service provision in affecting customer free-riding behavior. Besides, we find that the three mechanisms can reduce free-riding behavior to some extent. However, the extent varies under different mechanisms and is related to the cost-sharing fraction and the degree by which the manufacturer increases his online price. Further, we find that Mechanism 3 can realize overall optimization and members’ win–win situations. Finally, we conduct numerical examples to explore how different mechanisms affect supply chain efficiency. The results also provide managerial insights for dual-channel firms in practice.

Decisions and Coordination of Dual-Channel Supply Chain considering Retailers’ Bidirectional Fairness Concerns under Carbon Tax Policy

Climate change has caused huge negative impacts on the ecosystem. Carbon tax policy is an important regulatory means to reduce carbon emissions and mitigate climate change. Based on the carbon tax policy, this study discusses a dual-channel supply chain consisting of one manufacturer, one online retailer, and one offline retailer. Considering retailers’ bidirectional fairness concerns, the optimal carbon emission reduction strategy and the optimal pricing strategy of centralized and decentralized decision-making are discussed under consumers’ channel preference, respectively. On this basis, a coordination contract is proposed to realize the Pareto improvement of the dual-channel supply chain. We find that dual-channel retailers’ profits and prices are negatively correlated with the horizontal fairness concern coefficient and positively correlated with the vertical fairness concern coefficient. The profit of the manufacturer, the carbon emission reduction, and the bargaining power of consumers are all positively correlated with the horizontal fairness concern coefficient and negatively correlated with the vertical fairness concern coefficient. Maintaining an appropriate service level can maximize the profits of enterprises and positively affect the development of enterprises. Through the coordination contract, the supply chain can be promoted to form a win-win mode of complementary advantages.

Coordination and Compensation Model of E-Commerce Dual-Channel Supply Chain Based on Optimized Genetic Algorithm

Due to the conflict between traditional channels and electronic channels in the e-commerce dual-channel supply chain, retailers are threatened and need to be compensated in some way. Based on this, an e-commerce dual-channel supply chain coordination compensation model based on optimized genetic algorithm is designed. Based on the problem description and basic assumptions, analyze the manufacturer’s profit and the retailer’s maximum profit in the case of centralized decision-making and decentralized decision-making. The genetic algorithm is optimized by introducing a collaborative genetic operator, and the optimized genetic algorithm is used to obtain dual e-commerce channels. The maximum profit of the supply chain, so far, the model design is completed. Through comparative experiments, the optimized genetic algorithm used in the model is compared with two traditional algorithms. Experimental results show that the proposed algorithm takes shorter iteration time to solve the problem, its convergence is better, and it can effectively obtain a global optimal solution instead of a local optimal solution.

Pricing and Coordination of Dual-Channel Supply Chain with Online Reviews

Pricing and Coordination of Dual-Channel Supply Chain with Online Reviews

Dual-Channel Supply Chain Coordination With BOPS and a Revenue-Sharing Contract

The omni-channel strategies buy-online-pickup-in-store (BOPS) is used to cater to customers who want a consistent service experience in different channels. In this paper, the author thinks of BOPS as an effective strategy for encouraging some online customers to switch to offline stores with high online return losses. The author first studies an omni-channel supply chain with centralized and decentralized decision making and explains why online returns hurt the supply chain with respect to the matching rate and the unit return loss. Although different channels can be operated by the same firm or different firms, the author studies how to coordinate the entire chain using a revenue-sharing contract. When online return losses are high, it is effective to adopt BOPS to reduce online return losses; otherwise there is no need to do so. Finally, the author presents numerical experiments, including a special case, and shows that in many cases, using an appropriate revenue-sharing contract under the proposed mechanism can increase the profits of the entire supply chain and its members.

Dual-channel supply chain coordination considering targeted capacity allocation under uncertainty

This paper investigates a dual-channel supply chain (SC) composed of a manufacturer and retailer in which the manufacturer confronts random yield issues. Since supply uncertainty may lead to a production shortage, the manufacturer faces the problem of allocating the products to traditional/online channels. To address this problem, a novel product-allocation policy is developed in which the limited supply is allocated to traditional and online channels under a flexible strategy called “targeted capacity allocation”. In order to coordinate the proposed decentralized channel, a two-part tariff contract is suggested. Furthermore, opening a direct channel besides brick-and-mortar stores is discussed through analytical results. Then, the effectiveness of the targeted capacity allocation policy is investigated by comparing the results of the current model with a case, in which, the same policy is not applied. By doing so, some interesting managerial insights on the merit of applying the capacity allocation policy in managing dual-channel SCs under yield uncertainty are revealed. Finally, numerical analysis shows that the proposed contract can perfectly coordinate the SC and achieve the Pareto improving solution for both partners.

Decision Optimization and Interest Coordination of Dual-Channel Supply Chain Embedded by Two-Echelon Logistics Service Providers under the Dominance of Retailer

Taking the dual-channel supply chain embedded by two-echelon logistics service providers as the research object, this paper studies the optimal decisions of each decision maker under the centralized and decentralized decision-making mode led by the retailer. Based on the decentralized decision-making mode, an improved coordination mechanism of residual profit sharing is designed to realize the interest coordination, in which the bargaining power of all participants is fully considered. The results show that, under the decentralized decision-making mode, the profit of FLSP increases first and then decreases as the sensitivity coefficient of cross-service level increases, while the profits of other decision makers and the supply chain system decrease with the increase of sensitivity coefficient of cross-service level. The relative size of the price sensitivity coefficient of online and offline channel has an inconsistent impact on the profit of FLSP, while it has a consistent impact on the profits of other decision makers. The profit of FLSP fluctuates greatly with changes in the sensitivity coefficient, and it is difficult to be guaranteed in the entire supply chain system. On this basis, an improved coordination mechanism of residual profit sharing is designed. The results show that, after the introduction of bargaining power coefficient of the Nash negotiation model, the variation coefficient of the profits of all decision makers is smaller after coordination, and the profit growth rates are more uniform.

Coordination of dual-channel supply chain with perfect product considering sales effort

Coordination of dual-channel supply chain with perfect product considering sales effort

Dual Channel Supply Chain Coordination of Loss-Averse Newsvendor and Pre-sale Mode with Contract

This paper takes the dual-channel supply chain as the research background. Online supply adopts pre-sale strategy, while offline supply adopts inventory strategy and faces the newsvendor problem. The retailer is loss averse. We consider the decentralized decision making and retailer decision making and deduce the correlations between order quantity, price deviation and loss aversion. By the numerical analysis, we observed that the loss-aversion of retailer will make the members of the supply chain suffer losses. At last, we have verified that manufacturers cannot coordinate the supply chain with buyback contract. Furthermore, we achieve this goal with GLB which is an improved risk-sharing contract based on buyback and revenue sharing contract under certain conditions.

Coordination strategies in dual-channel supply chain considering innovation investment and different game ability

PurposeThis paper aims to investigate the impact of retailer innovation investment and its spillover’s effect on competitive dual-channel supply chain pricing and optimization strategy, and explore the coordination mechanism considering decision maker’s bargaining ability.Design/methodology/approachThe Cournot and Stackelberg game methodology are made use of for the duopoly decentralized and joint decision-making model. The bargaining theory with different negotiation ability was used to analysis the coordination mechanism. Then this paper validates the model by simulation techniques.FindingsThe results enlightened some interesting facts, the increase in innovation demand coefficient spur rise in channel pricing, innovation investment level, supply chain profit and consumer welfare. The rise in innovation spillover coefficient leads to increase in online channel pricing, supply chain profit and consumer welfare. Due to the innovation spillover effect, retailer has to maintain channel competitiveness either through low price or high innovation investment strategies. In addition, online channel pricing, supply chain profit and consumer welfare in joint decision-making scenario is greater than that of decentralized decision-making scenario, while the difference in retailer channel pricing depends on parameters value. The increase in retailer’s joint negotiation factor leads to decrease in channel pricing and innovation investment level. Furthermore, there existence of an optimal innovative investment cost sharing proportion threshold indicates the achievement of dual-channel supply chain coordination. A refinement equilibrium can be achieved through Robinstein bargaining game. A larger interest discount factor leads to decrease in profit.Originality/valueThe research provides a theoretical reference for dual-channel supply chain pricing and coordination strategy under channel competition environment. The research can develop innovative investment strategies for retailers and implement response strategies for manufacturers.

A Dual-Channel Supply Chain Coordination under Carbon Cap-and-Trade Regulation.

We consider a dual-channel supply chain coordination under a carbon cap-and-trade regulation. The dual-channel refers to the traditional retail channel and the network direct channel, and both two channels’ selling prices can affect the market demand. We formulate the problem as a supplier-Stackelberg game model and obtain the optimal pricing decisions and corresponding profits in centralized and decentralized systems. We explore the effects of cap-and-trade regulation on optimal decisions and profits. To improve the performance of the decentralized system, we propose online channel price discount and offline channel price discount contracts to coordinate dual-channel supply chain and provide a transfer payment mechanism to make win-win of both sides. Moreover, we investigate how carbon regulation affects the coordination performance. Numerical examples illustrate the process to find the appropriate price discount coefficient and show the coordination effects of two contracts.

Dual-Channel Supply Chain Coordination with Manufacturer’s Capital Constraint

Dual-Channel Supply Chain Coordination with Manufacturer’s Capital Constraint