Dual-channel Supply Chain Research Articles

Pricing and Service Decision in a Dual-Channel System Considering Zone of Service Tolerance

In the dual-channel retail industry, excessive enthusiasm in offline retailers’ services often extends beyond the customer’s “interpersonal distance zone”, leading to psychological discomfort for customers and a subsequent loss of demand. This situation can trap retailers in a dilemma known as the “service trap”. To address this issue, we introduce the concept of the zone of service tolerance, which encompasses desired and adequate levels of service, into a dual-channel supply chain consisting of an online channel manufacturer and an offline retailer. We incorporate the zone of service tolerance into the demand function of the offline retailer and establish its profit function, a dynamic game theory to demonstrate the existence of a linkage mechanism between the optimal selling price and service level, providing the conditions for such a mechanism to exist. Additionally, we establish conditions for offline retailers to avoid over-servicing or under-servicing and consider the impacts of these conditions, and we reveal the stability conditions of the offline retailers’ service decisions. Our findings indicate that both over- and under-servicing can lead to customer churn. For newly launched products, offline retailers risk losing customers by adopting a sales strategy focused on high profits and moderate sales (under-servicing). Similarly, for products nearing removal from the shelves, they risk losing customers by adopting a sales strategy focused on low profits and high sales (over-servicing). Furthermore, under certain ranges for the service sensitivity factor, desired service, or adequate service, the optimal service provided by offline retailers remains robust regardless of the manufacturer’s optimal selling price. This greatly simplifies the offline retailer’s decision-making process regarding service levels, as they can directly focus on providing the desired service without factoring in the manufacturer’s pricing strategy.

The retailer's information sharing decisions with manufacturer's encroachment and production learning effects

If the manufacturer can efficiently reduce costs and boost overall profits throughout the supply chain, he can send some incremental surplus to the retailer to motivate him to share his precise demand information. We study a two-period dual-channel supply chain where a manufacturer sells through a retailer with an advantage in demand information. The manufacturer can encroach and use production learning effects to reduce costs. Based on six scenarios under the "encroachment-dominated + production-learning effect-dominated + dual-factor" approaches, we investigated how the manufacturer's encroachment and the production-learning effect affected the retailer's decisions to share information. Some interesting results are obtained. First, a single-win, win-win, or lose-lose situation is generated for the supply chain participants by the dynamic competition mechanism under the combined effects of encroachment and the production learning effect. When more ambiguous demand information is cooperatively provided, both the retailer and manufacturer will benefit from information sharing. The win-win area increases with higher direct selling costs, whereas the win-win area decreases with increased production learning effects. Second, the retailer's information sharing benefits more from a higher level of the production learning effect when demand information is unclear, and information sharing benefits more from a lower level of the production learning effect when demand information is more accurate. In addition, in terms of profitability following information sharing, we ultimately discover that a unilateral payment contract renders the single cost reduction strategy superior to the single channel expansion strategy. The best incentive strategy to encourage retailer information sharing is to simultaneously implement cost reduction and channel expansion. Finally, we obtain some management insights that support supply chain parties in making decisions regarding the resolution of channel conflicts and the realization of information cooperation.

Tariffs, transportation, and profits in cross-border e-commerce: A dual-channel supply chain decision-making strategy.

The development of cross-border e-commerce platform promotes the new channel model between domestic and international. How to determine the dual-channel pricing decision of manufacturers and retailers under the condition of tariff and transportation heterogeneity has become an important and realistic problem. Based on the perspective of cross-border e-commerce dual-channel supply chain, this paper considers the impact of import tariff, transport heterogeneity and export tax rebate, compares and analyzes the performance difference between decentralized decision-making and centralized decision-making, and analyzes the impact of import tariff, export tax rebate and transport heterogeneity on cross-border e-commerce dual-channel pricing, demand and profit. The results show that the tariff is positively correlated with the manufacturer's direct selling price and the retailer's retail price, while the tariff is negatively correlated with the wholesale price, the demand and profit of direct selling channel and the retail channel. Export tax rebate rate is positively correlated with manufacturers' demand and profit and retailers' demand and profit, and negatively correlated with manufacturers' wholesale price, direct selling price and retail price. The increase of unit freight in direct channel is unfavorable to manufacturers and beneficial to retailers; The increase in unit freight rates in retail channels is bad for both manufacturers and retailers. Centralized decision-making is beneficial to supply chain demand and profits, and can improve the overall performance of the supply chain.

Pricing strategies for dual-channel supply chain considering showrooming effect and channel power structures

Pricing strategies for dual-channel supply chain considering showrooming effect and channel power structures

Pricing and Greening Strategies in a Dual-channel Supply Chain with Government tariffs and Cannibalisation under Demand Uncertainty

Pricing and Greening Strategies in a Dual-channel Supply Chain with Government tariffs and Cannibalisation under Demand Uncertainty

A quantum gaming study on thepricing of fresh mixed dual-channel supply chains considering the level of preservation effort

A quantum gaming study on thepricing of fresh mixed dual-channel supply chains considering the level of preservation effort

Pricing Strategies in Dual-channel Supply Chain with Discount and In-sales Service Consideration

Driven by increasing internet usage, Indonesia is experiencing a significant rise in e-commerce activities, with transactions projected to grow from 66 million to 99 million by 2029. This growth necessitates a hybrid approach combining online and offline sales channels to maximize market coverage. However, this dual-channel strategy poses challenges in pricing, as customer preferences heavily influence purchasing decisions. This study analyzes pricing strategies within a dual-channel supply chain (DCSC). It examines two main scenarios, centralized and decentralized systems, to determine optimal pricing strategies considering in-sales service and discount. The decentralized system employs a Stackelberg game model, where the manufacturer sets prices first, followed by the retailer. A clothing company is used as a practical case study to apply these mathematical formulations. The study highlights how parameter variations such as customer preferences, service, and unit costs influence price. Notably, the decentralized system often results in higher profitability than the centralized approach under specific conditions. Sensitivity analysis further reveals that while some parameters remain stable, customer preferences significantly affect pricing decisions. A preference for online shopping tends to favor a centralized strategy, indicating that coordinated pricing can mitigate channel cannibalization risks. The study underscores the complex interplay between pricing strategies, discounts, and in-sales services in dual-channel supply chains

Dual-Channel Supply Chain Pricing Coordination and Channel Selection with Reference Quality Effect Under Blockchain Traceability

This paper uses symmetry to develop a dual-channel supply chain network model, both with and without blockchain technology, ensuring that the solutions for pricing and channel selection are symmetric in both modes. And, in the model that does not employ blockchain technology, mechanisms are used to make the benefits of centralized and decentralized decision-making symmetrical. Consumers often have varied psychological expectations when choosing products. This paper considers the reference quality effect, where consumers establish a reference quality before making a purchase decision. However, the lack of transparency in product sales across supply chain channels can lead to a disparity between actual and expected product quality, impacting market demand and brand reputation. Therefore, manufacturers must balance increasing profits with meeting consumer demand for product traceability. This paper focuses on a dual-channel supply chain model involving manufacturers, retailers, and consumers. Firstly, the pricing issues and channel selections under centralized decision-making and a Stackelberg game with decentralized decision-making are comparatively analyzed in the mode of without adopting blockchain technology and adopt two-part pricing contract to coordinate. Secondly, the impact of blockchain technology on pricing is examined when it is adopted. Thirdly, pricing issues and channel selection strategies based on actual product quality in the dual-channel supply chain are compared under both models. Finally, numerical simulations validate the findings. The study found that: (1) the reference quality effect has a cross-positive influence on the equilibrium price and profit of a dual-channel supply chain; (2) the two-part pricing contract can mitigate the double-marginal effect and enhance profits; and (3) the adoption of the blockchain technology leads to increased equilibrium prices and total profits in the dual-channel supply chain compared to not using it. This paper offers a theoretical foundation for manufacturers and retailers to develop effective pricing and channel selection strategies in dual-channel operations to achieve higher returns.

Design of Dual-Channel Supply Chain Network Based on the Internet of Things Under Uncertainty

In this paper, a mathematical model of a dual-channel supply chain network (DCSCN) based on the Internet of Things (IoT) under uncertainty is presented, and its solution using algorithms based on artificial intelligence such as genetic algorithm (GA), particle swarm optimization (PSO), imperialist competitive algorithm (ICA), and gray wolf optimizer (GWO). The main goal of this model is to maximize the total DCSCN profit to determine the amount of demand accurately, price in direct and indirect channels, locate distribution centers, and equip/not equip these centers with IoT devices. The results show that with the increase in the uncertainty rate, the amount of demand and corresponding transportation costs have increased. This issue has led to a decrease in the total DCSCN profit. By analyzing the mathematical model, it was also observed that deploying IoT equipment in distribution centers has increased fixed costs. Examining this issue shows that by increasing the savings factor by 0.2, the total DCSCN profit has increased by 6.5%. By ranking the algorithms with the TOPSIS method, the GA was ranked as the most efficient algorithm, followed by PSO, ICA, and GWO. This IoT-enhanced dual-channel supply chain model not only aims to optimize traditional supply chain metrics but also introduces advanced, data-driven strategies for improving demand management, pricing, and infrastructure allocation, ultimately driving profitability in uncertain environments.

Dynamic pricing decision for new and returned products in a dual-channel supply chain based on customer segmentation

Dynamic pricing decision for new and returned products in a dual-channel supply chain based on customer segmentation

Green degree decision and pricing strategy of dual-channel supply chains

With the prevalence of green supply chains, the government has basic requirements for companies’ green investments and outcomes while consumers increasingly favor green products. Thus, green degree decision has garnered significant attention from manufacturers. This paper incorporates green degree decisions into a dual-channel supply chain and adopts a Stackelberg model to analyze the green degree and pricing strategies under centralized and decentralized decisions. We find that, when the manufacturer only decides on price, dual-channel choice is always the optimal strategy under centralized decision-making; however, under decentralized decision-making, the dual-channel choice will be chosen only when the wholesale price is low. Considering green degree decision, both direct and indirect channel prices increase with the green degree, and the indirect channel price is more sensitive to changes in the green degree under centralized decision-making; and higher green degrees are always advantageous for the retailer, but the manufacturer’s profit initially decreases and then increases as the green degree rises under decentralized decision-making. Moreover, the wholesale price is used as a strategic tool for the manufacturer to control the distribution channel, particularly when the green degree is not introduced, the manufacturer can always ensure the introduction of dual channels. Besides, higher consumers’ environmental awareness is always beneficial to channel members, as it promotes channel prices and green degree. This study provides strategic insights for optimizing pricing and green degree decisions in dual-channel supply chains to achieve better economic and environmental outcomes.

Pricing and Financing Strategies in a Dual-Channel Low-Carbon Supply Chain for Bilateral Capital-Constrained Retailers

In the context of low-carbon economy, financial constraints are prevalent among both upstream and downstream enterprises, exacerbated by the trend of online retailers extending into offline physical stores. This study first proposes and evaluates three financing combination models: “bank lending + advance payment,” (in short, AF), “bank lending + delayed payment,” (in short, DF), and “bilateral bank lending.” (in short, TF). It then examines the retailer’s dual-channel supply chain pricing and financing decision-making models under unified pricing strategy and independent self-pricing strategy respectively. The evaluation results indicate that among various financing models, the independent self-pricing strategy has the potential to enhance the retailer's profitability, outperforming the unified pricing strategy. In addition, when channel preference is significant, the retailer should prioritize the independent self-pricing strategy. A comparison of the optimal decisions across the three financing combination models indicates that both the cost coefficient of carbon emission reduction and the loan interest rate exert a limiting influence on the decision-making and income of all supply chain parties. Furthermore, the DF model emerges as a financing equilibrium strategy within the supply chain, with a shift to the AF model being considered only when the manufacturer’s loan interest rate is relatively high.

Research on the influence of Spillover effect on dual-channel supply chain under the background of live-streaming marketing

In the context of live streaming marketing, it is crucial for members of the supply chain to allocate resources not only to enhance product quality through quality improvement efforts but also towards marketing initiatives aimed at boosting sales. This paper focuses on a dual-channel supply chain comprising a brand vendor and a streamer and investigates the spillover effect of the live streaming channel on traditional channels and product goodwill. By analyzing the Stackelberg game and differential game, this study compares the optimal equilibrium strategy and equilibrium profit under two decentralized models: the brand vendor-dominated decentralized model and the streamer-dominated decentralized model, as well as the centralized decision-making model. Additionally, this paper presents the optimal strategy and profit function of the product goodwill trajectory for the brand vendor, streamer, and the entire supply chain, considering different spillover effects using numerical simulation. The analysis reveals that the level of quality improvement consistently increases over time, while the variation in product goodwill is more diverse. The optimal pricing of products is influenced by the market share of the channel with goods under the decision of the two decentralized models. Risk-averse brands tend to collaborate with waist and tail streamers to gain control over bargaining power, while risk-seeking brands often choose top streamers to distribute their goods when the market share of goods channels is significant. The overall profitability of the supply chain is influenced by consumers’ preferences for quality and marketing.

A closed-loop dual-channel supply chain network for leather products: An integrated simulation optimization clustering approach

A closed-loop dual-channel supply chain network for leather products: An integrated simulation optimization clustering approach

Optimizing sustainability: a dual-channel supply chain model considering the carbon abatement cost subsidy and the low-carbon consumption subsidy

Optimizing sustainability: a dual-channel supply chain model considering the carbon abatement cost subsidy and the low-carbon consumption subsidy

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.

Assessing cap-and-trade regulation's impact on dual-channel green supply chains under disruption

Assessing cap-and-trade regulation's impact on dual-channel green supply chains under disruption

Pricing and Service Decisions of Products in a Dual-Channel Supply Chain Introducing Ship-to-Store

This study investigates the optimal pricing and service decisions when implementing ship-to-store (STS) in a dual-channel supply chain comprising one BM store and one manufacturer. Homogeneous products within the market are categorized into mainstream and niche products. The effects of consumer service sensitivity, channel preference, and degree of personalization on optimal decisions and profitability are analyzed, followed by numerical simulation and analysis. It is found that (1) the supply chain should charge high prices for mainstream products and low prices for niche products to maximize profits. (2) Implementing STS is conducive to expanding niche products in the market when facing highly service-sensitive consumer groups. (3) Based on highly service-sensitive consumer segments, supply chains are more profitable implementing STS strategies in a centralized decision-making model than in a traditional dual-channel one; however, under decentralized decision-making, it is only profitable to implement an STS strategy if consumers have a low level of personalization and have a particularly pronounced preference for online direct marketing channels.

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.

Optimal Financing Strategy in a Dual-Channel Supply Chain with Agricultural Product

This study models a two-stage agricultural supply chain consisting of a financially constrained manufacturer of agricultural products and a financially stable retailer. We examine two supply chain structures: traditional and dual channel. Our analysis centers on the effects of consumer green preferences, consumer sensitivity to the freshness of agricultural products, and substitution rate between green and non-green agricultural products on the profitability of supply chain members. The purpose of this work is to study the optimal financing strategy for companies producing both regular and organic products simultaneously. We analyze optimal financing strategies for the manufacturer using three models: bank financing, internal debt financing, and internal equity financing. Our results indicate that in both traditional and dual-channel supply chains, increased consumer green preferences or greater sensitivity to the freshness of agricultural products improve supply chain profitability, while a higher substitution rate between green and non-green products reduces profits. Additionally, the manufacturer prefers internal debt financing when consumer environmental awareness is low. Conversely, as consumer environmental awareness increases, internal equity financing becomes more profitable. These findings offer valuable insights for agricultural product manufacturers facing financial constraints, assisting them in selecting the most appropriate financing model.