Dual-channel Supply Chain System Research Articles

The green product investment policy of carbon emission reduction on a competition duopoly and dual-channel supply chain

Considering the increasing emphasis on sustainable development, global warming effects have received attention for properly managing enterprise activities such as manufacturing, energy utilisation, resource consumption, and carbon emissions. The effect of greenhouse gases generated by carbon emissions is the most significant. This study develops a dual-channel supply chain system that consists of duopoly manufacturers and two common retailers and investigates the effects of the pricing policy, the decision-maker’s mental accounting, and carbon emission reduction investments on the channel members’ decisions. We conduct a numerical experiment, demonstrating that investments in carbon emissions reduction decrease carbon emissions while enhancing market competitiveness and profitability. This is primarily because customers prefer green products and exhibit higher brand loyalty, which makes them willing to pay premium prices for environmentally friendly products. Additionally, the leader-follower model shows the dominant role of leaders in pricing and investment decisions, while the multichannel structure highlights the importance of channel synergy. This study contributes to the field by examining intra- and inter-channel competition issues among leader-follower channel members within a multi-channel structure. This analysis facilitates practical profit-maximisation decision-making.

Research on Collaborative Strategy of Dual-Channel Supply Chain System for Product and Service Selection Driven by Experiential Demand

With the intensification of dual-channel competition, manufacturers are increasingly inclined to invest in offline showroom services to improve consumers' shopping experience, making it an emerging trend. Based on this background, this paper makes an in-depth study of how manufacturers choose the business strategy of physical showrooms in the dual-channel e-commerce environment, discusses the advantages and disadvantages of different service models, and analyzes the impact of these choices on consumer behavior and market competition. Through this research, this paper aims to provide valuable strategic suggestions for manufacturers to optimize their dual-channel service models. Four Stackelberg game models are constructed: 1) no service model (N), 2) manufacturers invest in service online products (MSM), 3) retailers invest in services online products (RSM), and 4) retailers invest in services online products (RSR). Then the optimal decision under the above four strategies is compared and analyzed, and the optimal choice of the manufacturer and the optimal service model of the whole supply chain are obtained.

Pricing Decisions and Game Analysis on Advanced Delivery and Cross-Channel Return in a Dual-Channel Supply Chain System

Advanced delivery and cross-channel return are new phenomena in Omni-channel marketing. This paper studies a dual-channel supply chain system composed of one online retailer, one physical store, and their ordinary manufacturer. It intends to explore the pricing decisions of retailers under four scenarios concerning the question whether deliver goods in advance and use cross-channel return. We analyze the impact of the operation costs of physical stores and the transportation costs of the online retailer on the above strategies, and with numerical examples, analyze the impact of consumers’ perceived value on the profits of each scenario. The results show that the default rate of consumers’ unpaid balance and the cross-channel return rate directly influences the online retailer’s strategy choice. The pricing of the physical store is related to the proportion of unpaid balance and return rate of the online retailer. Customers’ perceived value brought by advanced delivery leads to profit changes in supply chain members and is influenced by the online retailer’s cross-channel return strategy.

Consumers' purchasing decisions of a dual-channel supply chain system under return and warranty policies

ABSTRACT With the rapid growth of internet technology, particularly during the COVID-19 pandemic, a major portion of consumers have intended to do online shopping. Also the use of eco-friendly products is essential in today's environment and human health. Thus this paper investigates the consumers' purchasing behaviour towards substitutable non-green and eco-friendly products in a dual-channel (offline and online channels) supply chain system. The manufacturer offers a novel combination of promotions such as a return policy in the online channel and a warranty policy in the offline channel depending on the position and situation of consumers. Here, the environmental burden is reduced by considering remanufacturing/refurbishing used products during the warranty period. Therefore, consumers' demand depends on price, eco-friendliness level, warranty and return agreements. The entire problem is modelled under centralised and decentralised decision-making scenarios. Finally, the profit maximisation problem is formulated and solved in the game theory framework. A series of sensitivity analyses of various parameters is conducted numerically to validate the problem. It is observed that, due to the instant return facility in the online channel, online demand is higher than the offline with a higher warranty period.

Cooperative Advertising in Dual Channel Supply Chain System with Different Contracting Schemes

This paper deals with the efficacy of revenue-sharing and cost-sharing contracts in a dual-exclusive channel, in which each manufacturer announces a cooperative advertising policy, such as cost-sharing contract, revenue-sharing contract, or neither of them, to its retailer. Under such cooperative advertising schemes, two models are developed—one in which each manufacturer determines the sharing rate endogenously or exogenously under the Stackelberg game approach and the other in which each manufacturer and its exclusive retailer cooperatively determine the sharing rate under the Nash bargaining approach. Some counterintuitive findings suggest that the advertising coordination mechanism critically depends on parameters, such as the basic demand share and product substitution. Most notably, the higher sharing rate can lead the retailer’s performance to be worse, especially when the competition becomes fierce. Furthermore, the cost-sharing contract is more beneficial to the cooperative advertising mechanism than the revenue-sharing contract.

Ordering and transferring model of dual-channel supply chain with delivery time difference

Customers with different delivery times in online and offline channels often lead to conflicts between two channels, which causes the loss of a large number of customers. Therefore, it is necessary to use the difference between the online and offline delivery to achieve the balance of inventory through order transferring. Aimed at this problem, a dual-channel supply chain system consisting of an online channel supplier and an offline retailer has been developed and sales stage has been expanded to two ones in order to explore the endogenous impact mechanism of different delivery periods on order transferring, and the structural properties of the order transferring threshold. Based on this, the optimal ordering strategy has been discussed at the beginning of the sales season by game theory. Secondly, the optimal threshold for order transferring of offline retailers in each stage by dynamic programming has been explored, and the relationship between the threshold and the sales stage has further been investigated in order to achieve a win-win co-operation by determining the optimal co-operative behavior. Finally, a numerical example has analyzed the influence of co-operation on ordering quantity, inventory quantity, and profit. Furthermore, we have also illustrated the existence of a stable interval when the delivery rate difference rate is lower, which simplifies the implementation of this strategy and improves its operability.

Optimal pricing and greening decision in a manufacturer retailer dual-channel supply chain

Abstract In the current situation of globalization, the management of a dual-channel supply chain is a significant phenomenon to mark up a conflict between an online channel and traditional retail channels. Decisions of the green level of the product towards the dual-channel supply chain are beneficial for the growing tendency of a company. In this paper, we have generalized a single manufacturer and single retailer two-echelon dual-channel green supply chain. The manufacturer produces the product considering an arbitrary level of the greenness and then sells it through 1) a traditional retail channel and 2) an online channel. Demand in both the retail channel and online-channel is sensitive to price and level of the greenness of the product. The profit maximization SC model has been generalized under two decision-making structures. At first, a centralized decision-making structure is analyzed and the optimal decisions of SC members are exhausted. Secondly, we propose a decentralized decision-making structure to find the optimal selling price and level of greenness. The Stackelberg-game approach has been used to solve the decentralized scenario. This study provides the supply chain literature by coordinating environmental decisions on the dual-channel supply chain system. According to the numerical findings and sensitivity analyses, the centralized scenario is more profitable compared to the decentralized scenario. Finally, some managerial applications are derived based on the sensitivity of some key parameters.

Coordination Contracts of Dual-Channel Supply Chain Considering Advertising Cooperation

To study the impact of advertising cooperation on the decisions of dual-channel supply chain, a dual-channel supply chain system consisting of a single manufacturer and a single retailer is considered. The manufacturer can sell products to customers either through a direct marketing channel or through a traditional retail channel. This paper analyses the level of advertising investment and supply chain profits of centralized and decentralized dual-channel supply chains based on a Stackelberg game. Then, the decision models of dual-channel supply chain under different contracts are constructed, and how manufacturers can optimize the profits of both sides through an effective coordination mechanism is analyzed. The research results show that the improved advertising costs and revenue sharing contract can perfectly coordinate the dual-channel supply chain system. Numerical experiments illustrate the impacts of parameters on the optimal decision results.

Response surface methodology of dual-channel green supply-chain pricing model by considering uncertainty

ABSTRACT Companies apply dual-channel supply-chain (DCSC) by allocating online facilities without leaving conventional retailers. As a result, carbon emissions from production activities have increased in the company structure. Nowadays, DCSC researchers have a tendency to set their models in deterministic settings. These models cannot cope with the structure complexity. This research used Response Surface Methodology to analyse uncertainty in DCSC. The decision variables were the retailers and online prices, while the responses were price channel sensitivities (βo and βr), cross-channel sensitivities (γor and γro), profit estimation, and carbon emission estimation. In illustrating the real-world competition under oligopoly games, the optimisation phase used nonlinear programming under cooperative and non-cooperative scenarios. The result showed that in each channel, price combination had a significant effect on the response variables. Price differences on each channel could confirm the changes of customer preference channel. This study finds that the application of a response surface methodology can describe the significance of price to the DCSC system.

The Impacts of Fairness Concern and Different Business Objectives on the Complexity of Dual-Channel Value Chains

This paper considers a Stackelberg game model in a dual-channel supply chain, which is composed of a manufacturer and a retailer. The manufacturer and retailer consider fairness concern in the market competition, and the manufacturer takes market share and profit as his/her business objectives. The entropy complexity and dynamic characteristic of the dual-channel system are analyzed through mathematical analysis and numerical simulation, such as local stability, bifurcation, entropy, and chaos. The results show that, with the increase of price adjustment speed, the dual-channel supply chain is more complex and falls into a chaotic state in which system entropy increases; the stability of the dual-channel supply chain will be robust with the increase of weight of market share and weaken with the increase of the fairness concern level of the manufacturer and retailer. The high level of fairness concern of the manufacturer and retailer is always disadvantageous to the leading manufacturer but not always bad for the follower retailer. The performance of the dual-channel supply chain is improved with a high level of the manufacturer’s fairness concern and reduced with a high level of the retailer’s fairness concern. We also find the retailer will gain more profits in the chaotic state than the stable state in the Stackelberg game model. The variable feedback control method is applied to control the chaos of the dual-channel supply chain, and choosing appropriate control parameters can make the dual-channel supply chain system return to the stable state from the chaotic state, or delay the system to enter the bifurcation state. The research results can provide a guideline for enterprise decision-making.

Research on Quality Decisions and Coordination with Reference Effect in Dual-Channel Supply Chain

Although supply quality management has been studied extensively, one important marketing phenomenon, that is, reference effect has been rarely considered in dual-channel supply chain quality management literatures. In fact, the quality reference effect is also an important factor which influences consumer purchasing behavior. We aim to explore the influence of the reference effect on the optimal decisions and performance of a dual-channel supply. Thus, we formulate dynamic models that include the product quality reference effect and the service quality reference effect in a dual-channel supply chain system consisting of a manufacturer and a retailer under the different decision-making scenarios. Utilizing differential game theory, optimal decisions are obtained for the product quality and service quality decision under the different decision-making scenarios. In addition, the optimal decisions and profits are compared, then a service cost-sharing coordinating mechanism is proposed and proven to be effective in the supply chain system. The main results show when the initial reference service quality is low, the consumer service quality reference effect is beneficial to the manufacturer. The spillover effect of service quality is not conducive to the retailer and the manufacturer. When the initial reference product quality is low, both online and offline product quality reference effects are beneficial to the retailer and the manufacturer. The stable (or final) reference quality will not be affected by the initial reference quality. The sum of the two members’ profits under decentralized decision making is less than the total profit of the supply chain under centralized decision making. We design a cost-sharing coordinating mechanism to eliminate the double marginal effect.

Mobile-App-Online-Website Dual Channel Strategies: Privacy Concerns, E-Payment Convenience, Channel Relationship, and Coordination

Today, many mobile apps (MAs) act as an efficient channel for e-tailers to sell products. In addition to selling, some of these apps even include e-payment functions. This creates e-payment convenience but also a concern on privacy. In this article, we consider a supply chain with an e-tailer which sells through such an MA and an online website. The two channels influence the demand of one another. In the basic model, the e-tailer decides the promotion efforts in both channels. We interestingly find that the optimal promotion efforts are independent of e-payment convenience and privacy concern. We analytically establish that profit-sharing contract and two-part-tariff contract can coordinate the dual channel supply chain system but not revenue-sharing contract or sales rebate contract. In the extended models, we first consider the case when the e-tailer makes product pricing as well as promotion efforts decisions together. We analytically derive the optimal solution and find that the optimal pricing and promotion efforts depend on e-payment convenience and privacy concern. We further extend the analyses to the case when the e-tailer is risk averse and uncover that: 1) when the retail selling price is exogenously given, the optimal promotion efforts between the risk-neutral and risk-averse e-tailers are the same and 2) when the retail selling price is endogenous, the corresponding optimal retail selling prices and promotion efforts between the risk-neutral and risk-averse e-tailers are different. In particular, a higher degree of risk aversion will lead to higher (lower) promotion efforts and a higher (lower) retail selling price if demand volatility is sufficiently large (small).

Service and pricing strategies with competition and cooperation in a dual-channel supply chain with demand disruption

We study the pricing and service strategies with retailers’ competition and cooperation in a dual-channel supply chain system consisting of one manufacturer and two retailers, in which the manufacturer sells a single product through an online direct channel and two retail channels. Providing the product with value-added service, each retailer, in the presence of price and service competitions, can choose to cooperate or not. Considering each channel’s demand disruption, where the disrupted demand switches to other channels, and using game theory and two-stage optimization method, we derive the Stackelberg-Nash equilibrium in retailer cooperation (RC) model and retailer independence (RI) model, respectively. We conduct numerical experiments and find that the retailers’ cooperation enhances each retailer’s performance, but surprisingly reduces the profits of the manufacturer and the whole system. In both models, one retailer benefits from the demand disruption of other channels, whereas the manufacturer and the whole system are always worse-off in the presence of demand disruption from any channel, and better-off when the disrupted demand of one channel switches more to other channels.

A game theoretic analysis of dual-channel supply chain with nash bargaining fairness concern

PurposeThe purpose of this paper is to investigate the impact of fairness concerns of the retailer on the pricing policies of the supply chain partners, their individual profits, and the overall performance of a dual-channel supply chain composed of one manufacturer and one retailer. First, the authors model the dual-channel supply chain under retailer’s fairness concern. Second, the authors derive the optimal pricing policies of the channel members. Third, the authors analyze the effects of retailer’s fairness and bargaining power on the pricing strategies and profit functions of the dual-channel supply chain system.Design/methodology/approachThe authors adopt the manufacturer-led Stackelberg game theoretic framework, where the dominant manufacturer’s pricing decisions are based on the retailer’s pricing decision. The paper considers Nash bargaining solution as the fairness reference point to formulate the utility function of the fair-retailer. The paper uses this approach because it endogenously accounts for the competitive power and cooperative contribution of the channel members when they interact.FindingsThe authors find that the retailer’s fairness concerns are not always beneficial for its better performance. If the retailer is moderately sensitive towards its fairness, it will positively influence its performance. However, if the fairness concern becomes too high then it will negatively impact the retailer’s performance because it results in customers’ migration towards direct online channel for buying the products. In addition, if the retailer’s fairness concerns are mild, the manufacturer’s prices will decrease in retailer’s bargaining power, which is opposite otherwise.Originality/valueThe authors use Nash bargaining solution model as the fairness reference in the context of dual-channel supply chain, which is comparatively a recent approach and has been used independently from dual-channel supply chain system.

The Stability and Complexity Analysis of a Low-Carbon Supply Chain Considering Fairness Concern Behavior and Sales Service.

This paper studies a low-carbon dual-channel supply chain in which a manufacturer sells products through the direct channel and traditional channel, and a retailer sells products through the traditional channel. The manufacturer considers carbon emission reduction and has fairness concern behavior. The retailer provides sales service in the traditional channel and considers fairness concern behavior. The objective of this paper is to analyze the effects of different parameter values on the price stability and utility of the supply chain system emphatically using 2D bifurcation diagram, parameter plot basin, the basins of attraction, chaos attractor and sensitivity to the initial value, etc. The results find that the retailer’s fairness concern behavior shrinks the stability of the supply chain system more than that of the manufacturer’s fairness concern behavior. The system stability region decreases with the increase of carbon emission reduction level and the retailer’s fairness concern. The customers’ preference for the direct channel decreases the stable range of the direct channel, while it enlarges the stable range of the traditional channel. The supply chain system enters into chaos through flip bifurcation with the increase of price adjustment speed. In a stable state, the manufacture improving customer’s preference for the direct channel and the retailer choosing the appropriate fairness concern level can achieve the maximum utility separately. In a chaotic state, the average utilities of the manufacturer and retailer all decline, while that of the retailer declines even more. By selecting appropriate control parameter, the low-carbon dual-channel supply chain system can return to a stable state from chaos again. The research of this paper is of great significance to price decisions of participants and supply chain operation management.

Optimal Independent Pricing Strategies of Dual-Channel Supply Chain Based on Risk-Aversion Attitudes

Dual-channel supply chain system, channel optimization is influenced by channel attitude toward risk, in which risk is classified as general risk and interruption risk. To consider lead time may bring out supply conflicts, substitution effect of online channel and ratio of promotional cost are introduced and an independent model is developed. Based on that, the impact of interruption risk under risk-aversion attitude on both channels is further studied. Finally, it is proved how the risk attitude influences pricing and profit strategy.

The study on price and lead time decisions in retailer-dominated dual-channel supply chain

Retailers are the dominant firm in the dual-channel supply chain composed of manufacturers and retailers. Based on the assumption of linear correlations between price and quoted delivery lead time decision and market demands, a typical dual-channel supply chain model is constructed, and the following conclusions are derived. (1) Under different-price strategies, retailers’ online/offline channel optimal prices show linear relations with lead time and there are criticality conditions in positive/negative correlation changes. (2) Under same-price strategies, an analytic expression of end customer demanded quoted delivery lead time in the dual-channel supply chain system is proposed, and the value is uniquely confirmed by system parameters. (3) Manufacturer profits are the dependent decision variable in the retailer-dominated dual-channel supply chain system, but manufacturer profits are not affected by retailer decisions when online channel and offline channel reveal consistent quoted delivery lead time preference.

Competition and Coordination for the Dual-channel Supply Chain with Channel Preference

Aiming at the dual-channel supply chain system with the manufacturer owned direct channel and retail channel simultaneously, the consumers are divided into retail channel loyalty and brand loyalty two parts, under the condition of market demand are depend on the consumers’ channel preference, we studied to the pricing game and coordination between the manufacturer and retailer. The research result showed that the Nash equilibrium of price exists in centralized and decentralized supply chain system, the channel preference degree of consumers, the number of brand loyalty consumers are all have certain influence on supply chain’s optimal pricing strategy, and the price markup contract can realize the coordination of supply chain. The numerical experiment has showed the effectiveness of the conclusions.

Pricing and Inventory Strategy of Dual-channel Supply Chain under Random Demand and Retailer's Capital Constraint

A dual-channel supply chain system composed of one manufacturer and one retailer is considered in this paper, which existed uncertainty demands in both distribution channels and capital constraint on retailer. It set up the profit model of manufacturer dominated dual-channel supply chain system, studied to the optimal pricing and inventory strategies of decentralized and centralized supply chain, obtained the optimal pricing and inventory strategy of the two kinds of supply chain system. The analysis to the optimal solution indicated that the demand uncertainty of two distribution channels, deferred-payment rate etc, are all have certain influence relation on the pricing strategies of manufacturer and retailer. Numerical experiment has showed the effectiveness of the conclusions.

Sales Forecast of Dual-Channel Supply Chain based on Improved Bass and SVM Model

As the increasingly fierce competition, more and more manufacturers ha ve started to sell products through online channels apart from traditional retail channel. Meanwhile, increased competition h as significantly shortened the product life cycle, which makes sales forecast meaningful. Taking lack of historical record into accou nt, the sales forecast model based on historical sales data based on Bass model as well as the improved Bass model by consideration of service and purchase factors are firstly discussed. And then, based on analysis of above model, a multi-factors sales forecast model based on SVM (Support Vector Machine) for short-life cycle product in dual-channel is creatively proposed, which integrates multi-factors, s uch as the improved Bass model predictive value, seasonal index, number of customers, credit value in practice. Finally, through simulation analysis, it is found that SVM-based multi-factor model is able to improve sales forecast of short life-cycle products in dual-cha nnel supply chain system.