Retail Cost Research Articles

A multi-objective stochastic optimization model for electricity retailers with energy storage system considering uncertainty and demand response

The development of electricity retailers with energy storage systems expands the energy use ways of users, promotes the consumption of clean energy power generation, and facilitates the development of electricity market. However, due to the imperfect trading mechanism and uncertainties of power supply and demand, the business risk continues to be large, which leads to limited sustainable development of electricity retailers. Therefore, based on the design of a trading mechanism of electricity retailers with energy storage systems in the electricity market, this paper constructs a multi-objective stochastic optimization model of the retailers’ flexible purchase of electricity, aiming at minimizing the cost of electricity retailers and maximizing the consumption of clean energy power generation. In the model, the uncertainty of supply and demand and the demand response are taken into consideration. The results show that: (1) Compared with the conventional optimization model, considering the uncertainty in the medium-and-long-term electricity trading, although the demand for clean energy is reduced, the retail cost of temporary electricity in the day-ahead trading is also reduced. (2) The retailers make full use of flexible power charging and discharging, so the extra cost of purchasing electricity in the day-ahead trading caused by the uncertainty of clean energy is reduced via the energy storage demand response. (3) A price-based demand response can change the electricity purchase demand of retailers, improve the transaction volume between retailers and clean power enterprises in the medium-and-long-term electricity trading, and reduce the energy purchase cost while improving the consumption of clean energy power generation. (4) Due to the impact of initial investment cost and other factors, there is no obvious linear relationship between the capacity of energy storage systems and the reduction of retail energy purchase cost; therefore, it is necessary to apply energy storage systems reasonably to achieve the optimal economic benefits.

Marketing System of Small Scale Broiler in Selected Areas of Tangail District

The study was attempted to explore the small scale broiler farming of Tangail district. Bhuapur, Ghatail, Kalihati, Shakhipur, Delduar and Basail Upazilas were selected purposively for this study. Primary data were collected through face to face interview with the respondents of broiler farmers during February to July, 2016. Secondary data were collected from the BBS, poultry production and marketing reports, journals, DAM, DLS and MS theses. A total of 30 broiler farm owners and 54 intermediaries were selected by applying purposive sampling technique. In the production and marketing system of broiler, many intermediaries were involved such as Bepari, Paiker, Wholesaler and Retailer. Marketing of broiler, produced in Tangail district, was moved from producers to the consumers through four separate chains. The average production cost of farmer for 500 birds was BDT 54781.25, and marketing cost of paiker, wholesaler and retailer were BDT 1230, BDT 1310 and BDT 440, respectively. However, beparies received highest marketing cost which was BDT 1370/500 birds. Transportation was found as the highest cost item which was 37.96%, 39.02% and 40.46%, in case of bepari, paiker, and wholesalers, respectively, but there was no transportation cost of retailer. Broiler farmers sold 90% of their broiler to paiker/bepari and remaining 10% to retailer (distance paiker) sold directly. Paikers sold 85.63% of their broilers to retailers and 14.34% to retailers through wholesalers. Consumer purchases100% of broiler from the retailers in the study areas. Broiler producers did not get fair price due to lack of economic storage facilities, existence of stronger middlemen, inadequacy of veterinary care and services, inefficient transportation facilities, and lack of proper marketing information. It could be concluded that institutional credits, timely supply of inputs and stable price of broiler should be ensured along with the provision of transport and market facilities.
 Res. Agric., Livest. Fish.7(2): 243-254, August 2020

Channel Integration Choices and Pricing Strategies for Competing Dual-Channel Retailers

The “buy online and pick up in store” (BOPS) mode is gaining tremendous popularity among retailers since it is convenient for consumers and brings additional store sales to retailers. However, operating the BOPS channel requires additional investment, which is a challenge for retailers. This article considers the pricing strategies of competing dual-channel retailers, focuses on whether and when they should adopt the BOPS strategy, and explores the impacts of market factors on the equilibrium outcomes. Since retailers’ decisions are usually made sequentially in reality, we use the Stackelberg game model to analyze retailers’ optimal strategies. First, we show that the follower's price is not always lower than the leader's price. Specifically, when the unit additional profit from cross-selling of the follower is low enough, the follower will set a higher price than the leader. Second, we find that retailers prefer the BOPS strategy when the fixed costs for offering BOPS channels are low enough, or when the difference between the additional profits from cross-selling of two retailers is sufficiently large. Third, we present an interesting insight: an increase in product return probability or retailer cost of handling a returned product can be beneficial to retailers.

Benchmarking Water Retail Cost Efficiency in England and Wales

Privatised water companies in England and Wales are subject to economic regulation by the industry regulator (Ofwat). Ofwat sets 5-year caps on the prices’ companies can charge their customers. These caps are in part based on the benchmarking of companies’ costs. Ofwat has not previously used econometrics to benchmark domestic retail costs, but it undertook such modelling in its 2019 price review analysis. This is the first journal article to present an efficiency analysis of domestic water retail costs in England and Wales. Our approach is different from Ofwat’s, as we propose two new ways of accounting for differences in the effect on cost of the number of single and dual service customers (water/sewerage-only and water and sewerage). Some companies’ cost efficiencies vary greatly between the two ways. Depending on the approach to price capping, this could possibly have non-negligible implications for companies’ caps.

Pharmacoeconomic analysis by the cost-minimization method of fluconazole drugs recommended for use in candidiosis

Candidiasis is a group of fungal diseases of the skin, mucous membranes and internal organs caused by fungi of the genus Candida. Candidiasis treatment is mainly carried out with antifungal agents for systemic use. Fluconazole preparations, which have proven clinical efficacy and safety, and are also most often used in Ukraine, are presented in the largest number of TN in the pharmaceutical market.
 The aim of the work is to analyze cost minimization when using fluconazole preparations for pharmacotherapy of three different pharmacotherapy schemes for candidiasis.
 The analysis of minimizing the costs of fluconazole preparations was carried out using the retail cost of medicines according to the Morion company Pharmexplorer analytical market research system (as of February 2019). In the process of calculating the cost of the course of treatment of patients with candidiasis, fluconazole preparations used for pharmacotherapy of 1) vaginal candidiasis were used; 2) dermatomycosis, atrophic candidiasis of the mucous membranes, oropharyngeal candidiasis; 3) candidiasis of the esophagus, candiduria. The study evaluated only the direct costs of treating patients with candidiasis with fluconazole preparations. Calculation of the cost of pharmacotherapy with fluconazole was carried out taking into account the price per package of drugs, the daily dose of drugs with the determination of the cost of one unit (tablets, capsules), one day of treatment and the course of treatment.
 Based on the results obtained, using the pharmacoeconomic method of «cost minimization», the least costly drugs were selected for the course of treatment with fluconazole. The calculation results showed that the minimum direct costs for the course of pharmacotherapy of the vaginal candidiasis are 9.88 UAH; the minimum direct costs for the treatment of dermatomycoses, atrophic candidiasis of the mucous membranes, oropharyngeal candidiasis are UAH 26.01, and for the treatment of candidiasis of the esophagus and candiduria – UAH 50.28.
 In a difficult socio-economic situation in Ukraine, the use of the least expensive representatives of antifungal drugs for systemic use is economically feasible. The results of this study will allow the doctor or pharmacist to choose fluconazole preparations in various doses and dosage forms for patients with low solvency.

Credit linked two-stage multi-objective transportation problem in rough and bi-rough environments

With a rapid growth of research in multi-objective transportation problem, rough and bi-rough sets are two new mathematical ideas for formulating real-world-based problems involving uncertain data. In this study, we have investigated a two-stage multi-objective transportation problem by considering credit period policy under rough and bi-rough environments. In this regard, three conflicting objective functions have been optimized simultaneously under the same restrictions. In first objective function, we have presented the minimization of transportation cost of a production house. In second objective function, total transportation cost of retailers has been minimized. But, in last one, we have maximized total profit of distributors. Besides, due to existence of different types of uncertainties in our real-life problems, in the proposed model, independent parameters (including, actual transportation cost, requirement of the retailers, and cost per unit distance) have been considered as rough in nature and dependent parameters such as demanded transportation cost and demand of the distributors have been considered as bi-rough in nature. Moreover, to convert the uncertain model into an equivalent deterministic form, a rough and bi-rough programming approach has been derived along with the expected value approach. Finally, by using these ideas, the mathematical model of our considered transportation problem has been illustrated. After that, the proposed model has been solved by applying NSGA-II algorithm (elitist non-dominated sorting genetic algorithm) with some simulated numerical data. Some sensitivity analysis associated with our proposed model has also been discussed to show the effectiveness of the model.

Simulation Model for Assessment of Non Deterministic Inventory Control Techniques

Inventory procurement is one of the most important aspects of the supply chain. This aspect is supported by specific numerical techniques to determine the optimal lot sizes to ensure prompt supply without increasing operational costs for retailers and providers. However, the practical performance of these techniques is only evaluated after implementation, which can lead to unnecessary risks and costs. In such case, simulation can provide the means to evaluate the dynamic performance of these techniques to reduce this risk. The present work describes the development of an open computational simulation code for two non-deterministic inventory control techniques. The functionality of this code provides insights regarding the disadvantages of considering just the static numerical parameters of the model and the advantages of the dynamic aspect of simulation. This contribution can be used by the academic researcher or professional within the logistic field to evaluate and improve their strategies for inventory procurement.

Investigation of the governance structure of the Nairobi dairy value chain and its influence on food safety

The dairy value chain of Nairobi is comprised, in its majority, of small-scale independent enterprises that operate within a complex interlinked system. In this complexity, the coordination and power structures of the system may have major influences on the management of dairy food safety. Therefore, the aim of this study was to investigate the governance structure and challenges faced by stakeholders throughout the Nairobi dairy value chain and assess their potential implications on food safety. Qualitative data were collected through focus group discussions and key informant interviews based on a dairy value chain mapping framework previously developed. Thematic analysis enabled identification of governance themes, key challenges and analysis of their implications on food safety. Themes were organized depending on their association with farmers (informal settlement or peri-urban), dairy cooperatives, dairy traders, processing companies, retailers or government officers. The identified governance themes included: i) weak linkage between government and farmers, ii) inadequate compliance with government regulations by traders and retailers, iii) emphasis on business licenses and permits for revenue rather than for food safety, iv) multiple licensing resulting in high business cost and lack of compliance, v) fragmented regulation, vi) unfair competition and vii) sanctions that do not always result in compliance. The key challenges identified included, among others: i) inadequate farmer support, ii) harassment of traders and retailers and iii) high business costs for traders, retailers, dairy cooperatives and large processors. The implication of governance and challenges of food safety were, among others: i) inadequate extension services, ii) insufficient cold chain, iii) delivery of adulterated and low milk quality to bulking centers, iv) inadequate food safety training and v) lack of policies for management of waste milk. The range of issues highlighted are based on stakeholders’ perceptions and reflects the complexity of the relationships between them. Many of the governance themes demonstrate the linkages that are both beneficial or confrontational between the formal and informal sectors, and between industry and regulatory authorities, with possible direct food safety consequences. Findings obtained provide indications to decision-makers of potential governance areas that could help improve efficiency and food safety along the dairy value chain.

Low-cost, easy-to-build noninvasive pressure support ventilator for under-resourced regions: open source hardware description, performance and feasibility testing.

AimCurrent pricing of commercial mechanical ventilators in low-/middle-income countries (LMICs) markedly restricts their availability, and consequently a considerable number of patients with acute/chronic respiratory failure cannot be adequately treated. Our aim was to design and test an affordable and easy-to-build noninvasive bilevel pressure ventilator to allow a reduction in the serious shortage of ventilators in LMICs.MethodsThe ventilator was built using off-the-shelf materials available via e-commerce and was based on a high-pressure blower, two pressure transducers and an Arduino Nano controller with a digital display (total retail cost <75 USD), with construction details provided open source for free replication. The ventilator was evaluated, and compared with a commercially available device (Lumis 150 ventilator; Resmed, San Diego, CA, USA): 1) in the bench setting using an actively breathing patient simulator mimicking a range of obstructive/restrictive diseases; and b) in 12 healthy volunteers wearing high airway resistance and thoracic/abdominal bands to mimic obstructive/restrictive patients.ResultsThe designed ventilator provided inspiratory/expiratory pressures up to 20/10 cmH2O, respectively, with no faulty triggering or cycling; both in the bench test and in volunteers. The breathing difficulty score rated (1–10 scale) by the loaded breathing subjects was significantly (p<0.005) decreased from 5.45±1.68 without support to 2.83±1.66 when using the prototype ventilator, which showed no difference with the commercial device (2.80±1.48; p=1.000).ConclusionThe low-cost, easy-to-build noninvasive ventilator performs similarly to a high-quality commercial device, with its open-source hardware description, which will allow for free replication and use in LMICs, facilitating application of this life-saving therapy to patients who otherwise could not be treated.

Marketing channel, cost, and margins of crayfish wholesalers and retailers in Rivers State, Nigeria

Marketing channel, cost, and margins of crayfish in Rivers State, Nigeria was studied using a total eighty traders (thirty retailers and fifty wholesalers) selected from six major crayfish markets using a multi-stage sampling technique, six local government areas were selected purposively based on the existing crayfish trading activities, from each LGAs a major crayfish market was selected. Primary and secondary sources of data were collected for the study. The selling prices at wholesale and retail levels of the marketing channel and cost incurred in marketing were used to address the objectives. The results of the study showed that the direction of flow of crayfish, three marketing channels were identified, although, wholesalers get profit, they also incur more cost in marketing than retailers, the highest and lowest average selling price were recorded as N1834.43/kg and N1279.90/kg for crayfish traders, the consumers’ price percentage that was received by the crayfish farmers (harvesters) is 28.90% and 16.69% of the net marketing margin on retail and wholesale respectively of the selling price, while both levels were inefficient in their marketing efficiency. The major challenges faced by crayfish traders in Rivers State were poor access to credit facilities, inadequate storage facilities and high market levy. Provision of government and private access to credit for traders, improved storage facilities and formulation and enactment of independent act for crayfish marketing were highly recommended.&#x0D; Keywords: Marketing channel, crayfish, cost and margins

Cost Comparison Between 2 Responses to Hepatitis A Virus Incidents in Restaurant Food Handlers-New York City, 2015 and 2017.

While the New York City Department of Health and Mental Hygiene (DOHMH) can use agency-wide emergency activation to respond to a hepatitis A virus-infected food handler, there is a need to identify alternative responses that conserve scarce resources. To compare the costs incurred by DOHMH of responding to a hepatitis A case in restaurant food handlers using an agency-wide emergency activation (2015) versus the cost of collaborating with a private network of urgent care clinics (2017). We partially evaluate the costs incurred by DOHMH of responding to a hepatitis A case in a restaurant food handler using agency-wide emergency activation (2015) with the cost of collaborating with a private network of urgent care clinics (2017) estimated for a scenario in which DOHMH incurred the retail cost of services rendered. Costs incurred by DOHMH for emergency activation were $65 831 ($238 per restaurant employee evaluated) of which DOHMH personnel services accounted for 85% ($55 854). Costs of collaboration would have totaled $50 914 ($253 per restaurant employee evaluated) of which personnel services accounted for 6% ($3146). Accounting for incident size, collaborating with the clinic network was more expensive than agency-wide emergency activation, though required fewer DOHMH personnel services.

Whatever happened to disintermediation?

Two key questions were discussed in the evolution of electronic markets over the years. How will future traffic on the World Wide Web and Internet affect each segment of an industry value chain? Will electronic markets provide new and innovative areas of opportunity for retailers, producers, and consumers as well? Electronic markets are unique virtual organizational forms and evolve through the automated mediation of market transactions. Consequently, we observe that traditional industry chains potentially lose their relative importance since business can be carried out faster and often with more and new opportunities. The developments have shown that consumers profit from an increased access to a vast selection of goods, which in turn will cause a restructuring and redistribution of profits among the stakeholders along the virtual value chain. There will also be an evolution from single-source sales channels to electronic markets. In particular, electronic markets may lower coordination costs for producers and retailers, lower transaction and distribution costs, or eliminate retailers and wholesalers entirely, as consumers directly access manufacturers. In the same way as electronic markets make disintermediation possible, disintermediation may suggest the deployment of electronic markets as they function as a form of eventual reintermediation in this context. Consumers’ full access to the market will absorb an issue that policymakers need to explore.

A hybrid heuristic algorithm for cyclic inventory-routing problem with perishable products in VMI supply chain

The VMI supply chain can bring benefit to concerned parties. The paper studies cyclic inventory-routing problem (IRP) under VMI policy. Cyclic IRP as a variant of the IRP belong to long-term decision. It means once the replenishment policy and vehicle routing are determined, they will stay the same in the following periods. This paper considers the loss cost caused by perishability of perishable products and assumes the demand is dependent on price and stock. Based on the above consideration, three different cyclic IRP models for perishable products with stock and price dependent demand in VMI supply chain are put forward. They are IRP model ending with shortage, IRP model starting with shortage, and IRP model with no shortage. These models are composed of a single manufacturer and multiple retailers. The objective is to minimize the average total cost. The total cost includes not only fixed and transportation cost of vehicles, inventory (order and holding) and shortage cost of retailers, but also startup and holding cost of manufacturer. The proposed models are nonlinear mixed integer programming models and NP-hard problem. In order to solve these models, a hybrid heuristic algorithm that is developed by combining cuckoo algorithm with improved Clarke-Wright savings algorithm is developed. In computational experiments, the proposed algorithm is compared with the optimization solver. The results demonstrate the proposed algorithm outperforms the optimization solver. In addition, the results show the average total cost may be reduced by using the strategy of stockout in some cases. Sensitivity analysis is also implemented to study the influence of parameters on optimal solution. The results of computational experiments validate the applicability of the proposed models and the effectiveness of hybrid heuristic algorithm. The study also provides policymakers with management implications. Finally, the conclusions and future research directions are given.

Measuring 3D indoor air velocity via an inexpensive low-power ultrasonic anemometer

The ability to inexpensively monitor indoor air speed and direction on a continuous basis would transform the control of environmental quality and energy use in buildings. Air motion transports energy, ventilation air, and pollutants around building interiors and their occupants, and measured feedback about it could be used in numerous ways to improve building operation. However indoor air movement is rarely monitored because of the expense and fragility of sensors. This paper describes a unique anemometer developed by the authors, that measures 3-dimensional air velocity for indoor environmental applications, leveraging new microelectromechanical systems (MEMS) technology for ultrasonic range-finding. The anemometer uses a tetrahedral arrangement of four transceivers, the smallest number able to capture a 3-dimensional flow, that provides greater measurement redundancy than in existing anemometry. We describe the theory, hardware, and software of the anemometer, including algorithms that detect and eliminate shielding errors caused by the wakes from anemometer support struts. The anemometer has a resolution and starting threshold of 0.01 m/s, an absolute air speed error of 0.05 m/s at a given orientation with minimal filtering, 3.1° angle- and 0.11 m/s velocity errors over 360° azimuthal rotation, and 3.5° angle- and 0.07 m/s velocity errors over 135° vertical declination. It includes radio connection to internet and is able to operate standalone for multiple years on a standard battery. The anemometer also measures temperature and has a compass and tilt sensor so that flow direction is globally referenced regardless of anemometer orientation. The retail cost of parts is $100 USD, and all parts snap together for ease of assembly.

Marketing System and Efficiency of Egg in Selected Areas of Mymensingh District in Bangladesh

The poultry sector continues to grow and industrialize in many parts of the world. The study was undertaken to analyze the marketing system of commercially produced eggs, estimate cost and margin of egg traders in some selected areas of Mymensingh district in Bangladesh in 2018. Sixty (60) respondents were selected as total sample size where 19 were layer farm owner and 48 were egg traders. Two Upazila of Mymensingh district (Mymensingh Sadar and Trishal) were selected based on the production concentration and marketing. Two villages from each Upazila were selected for survey and data were collected from the traders for the study. Five different channels were identified according to present egg marketing system. The average gross return of bepari, wholesaler and retailer for 100 eggs are found Tk. 26.67, Tk. 31.82 and Tk. 37.14, respectively. The average cost of bepari, wholesaler and retailer for 100 eggs were found Tk.11.41, Tk.13.54 and Tk.15.78, respectively. The net margin of 100 eggs were calculated and found Tk.15.26, Tk. 18.28 and Tk. 21.37 respectively for bepari, wholesaler and retailer. The producer share was higher i.e. 86.56% and price spread was lower (Tk. 85.84) in channel IV. In case of efficiency channel IV was more efficient than other channels. Results suggested that, development of this enterprise is helpful in employment generation and poverty alleviation. The outcomes of this study may contribute to accurate and reliable data and other necessary information from the field level and future egg marketing system of various regions in Bangladesh.

Risk-Based Traded Demand Response Between Consumers’ Aggregator and Retailer Using Downside Risk Constraints Technique

Electricity retailer is the most critical player in the restructured electricity market. Retailer's electricity procurement problem is a big challenge for them. Electricity retailer can purchase their energy from various options such as pool market, forward contracts, and etc. A relatively new way with a lesser investigation is the demand response exchange market. In this paper, the risk-constrained stochastic power procurement problem of electricity retailers is formulated by modeling the uncertainty of pool-market price and consumers' electricity demand. The Downside risk constraints (DRC) risk-evaluation method is used to obtain risk-based power procurement scheduling of electricity retailers. By using the proposed method, conservative electricity retailer can experience a scenario-independent strategy over the stochastic optimization. In other words, the proposed risk strategy is such that impose more cost for electricity retailer while having an equal cost in all scenarios. Based on the obtained results, the operation cost of electricity retailers in all scenarios is closed to about $4827570, which is a relatively zero-risk strategy due to equality overall scenarios. Besides, results are compared in two cases to demonstrate the advantages of the proposed risk-evaluation method. Also, the Pareto front between risk-in-cost and expected cost can introduce an optimal risk-strategy for electricity retailers in the presence of uncertainties. Finally, the risk-averse strategy of electricity retailer is proposed to obtain the retailer's optimal conservative schedule during power procurement in the presence of uncertainties.

On the Optimality of Inventory and Shipment Policies in a Two-level Supply Chain under Quadratic Price Dependent Demand

In this paper, a two-level supply chain consisting of a single-manufacturer supplying a single kind of product to a single-retailer is considered. A mathematical model is developed for both the centralised and de-centralised supply chain. The novel idea of the proposed model is that the demand is expressed as a quadratic function of the retailer's unit selling price. Ordering/setup costs, carrying costs and transportation costs are considered for model development. Replenishment quantity at the retailer and shipment frequency from manufacturer to retailer are considered as the decision variables. The objective of the proposed model is to demonstrate the optimality of total variable costs of the respective retailer, manufacturer and the supply chain under quadratic price dependent demand. Computer program is written in MATLAB and the model is solved with the help of a case study data. Further, the sensitivity analysis is carried out and finally, managerial implications are derived.

On the optimality of inventory and shipment policies in a two-level supply chain under quadratic price dependent demand

In this paper, a two-level supply chain consisting of a single-manufacturer supplying a single kind of product to a single-retailer is considered. A mathematical model is developed for both the centralised and de-centralised supply chain. The novel idea of the proposed model is that the demand is expressed as a quadratic function of the retailer's unit selling price. Ordering/setup costs, carrying costs and transportation costs are considered for model development. Replenishment quantity at the retailer and shipment frequency from manufacturer to retailer are considered as the decision variables. The objective of the proposed model is to demonstrate the optimality of total variable costs of the respective retailer, manufacturer and the supply chain under quadratic price dependent demand. Computer program is written in MATLAB and the model is solved with the help of a case study data. Further, the sensitivity analysis is carried out and finally, managerial implications are derived.

Development of evolutionary algorithms in the problems of managing the assortment of network pharmacies

The article explores the problems and existing methods of optimizing the financial performance of network pharmacies. Proposed a genetic method with the modification of the mutation operator to solve the problem of managing the range of pharmaceutical products based on evolutionary methods. The fundamental difference between the developed genetic algorithm and its existing counterparts is the ability to control the mathematical distribution of the values of the solution, which prevents premature convergence of the genetic algorithm and uses all proposed genes in fractions according to the chosen distribution model. In addition, three modifications to the genetic operator of mutations are proposed. The first modification is to choose the substitution values for a mutation not in a random way, but from a series, that obeys the law of normal distribution. The second modification serves to determine the appropriateness of the chromosome mutation, based on knowledge of retrospective and predictive data using as a predictive model of SNM. The third modification is the combination of the two modifications mentioned. The application of the developed methods will lead to a more effective use of the pharmacy area, to reduce unmet demand and, ultimately, to reduce the retail cost of drugs by reducing the costs of storing and servicing the suboptimal loading of the pharmacy

The optimal channel structure with retail costs in a dual-channel supply chain

This paper considers a dual-channel supply chain consisting of a monopoly manufacturer, an independent retailer and a continuum of heterogeneous consumers who are classified into two segments according to their channel preferences. Due to various activities undertaken in different channels leading to retail costs, we highlight the effect of retail costs (i.e. fixed, linear and quadratic costs) on the optimal channel structures for the manufacturer, consumers and society. Our results show that the retail cost greatly influences the optimal channel structures for different parties. First, the manufacturer's channel selection varies considerably across retail costs. Specifically, when there are variable costs (linear and quadratic costs): on the one hand, the manufacturer might give up the grocery encroachment strategy; on the other hand, some profitable strategies which are missed in the case with fixed cost are likely to be implemented. Second, both consumer surplus and social welfare are maximised in the manufacturer-owned online channel unless the linear costs are sufficiently high or the cost gap between different channels is large. Collectively, the optimal channel structure for the manufacturer is not always optimal for consumer surplus or social welfare.