Joint pricing, ordering and order fulfillment decisions for a dual-channel supply chain with demand uncertainties: A distribution-free approach

With the advancement of technology, many companies provide customization facilities to customers. This facility provides a vast variety to customers which enhances the level of customer satisfaction. This approach helps various technologically advanced companies to increase their profit. In this paper, a dual-channel supply chain model is developed with the aforementioned customization strategy with the target of increasing the profit of the firm. In dual-channel, the core or standard product is provided to the customer through a traditional retail channel, whereas the customized product is made available through the online channel. This article incorporates a modification in the existing dual-channel policy on the number of customers that switch between the offline and online channels. Moreover, a preassigned threshold value is also assumed which signifies the decrease in demand that takes place if the difference between the selling price of offline and online channels crosses a fixed specified threshold value. In addition to that, due to fluctuation and uncertainty of demand, both variability and randomness may occur simultaneously. Thus, the price-sensitive stochastic demand is considered to develop the dual-channel centralized supply chain model with customization. A max-min distribution-free approach is applied to deal with the randomness and variability of demand. The model is analyzed and validated with numerical experiments and graphical analysis. Consequently, the article concluded that it is better to adopt a dual-channel supply chain policy for better profitability than the traditional single-channel supply chain as this firm will be able to provide customized products to customers. Moreover, if the difference between the selling prices of the offline and online channels is greater than the preassigned threshold value, then the shifting of customers takes place depending upon the factor that which channel’s selling is less in comparison to another.

Download Full-text

Dynamic pricing and coupon promotion strategies in a dual-channel supply chain based on differential game

Kybernetes ◽

10.1108/k-02-2021-0160 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Zonghuo Li ◽

Wensheng Yang ◽

Yinyuan Si

Keyword(s):

Supply Chain ◽

Differential Game ◽

Dynamic Pricing ◽

Brand Image ◽

Content Type ◽

Dual Channel ◽

Promotion Policies ◽

Promotion Strategies ◽

Joint Pricing ◽

Dual Channel Supply Chain

PurposeThis paper investigates a dual-channel supply chain in which a manufacturer offers coupons in the online channel and the retailer in the offline channel. The optimal pricing and coupon promotion policies are explored, and the brand image under different promotion scenarios is studied.Design/methodology/approachThree differential game models, namely no coupon is offered, coupons offered by the manufacturer and coupons offered by the retailer, are constructed.FindingsThe results show that the manufacturer and retailer intend to conduct coupon promotions under a large coupon redemption rate. Coupon promotion derives a higher price and profit for the issuers, and the manufacturer can free-ride on the retailer's coupon promotion. The retailer's profit in the retailer-promotion scenario may be lower than that in the manufacturer-promotion scenario in some special conditions. Besides, price, coupon face value, brand image and profit increase over time. After multiple cycles game, the operational strategy evolves to an optimal equilibrium status.Originality/valueThis paper provides guidance and advice for dual-channel supply enterprises to implement joint pricing and coupon promotion strategies under multiple sales seasons.

Download Full-text

PRICING AND INVENTORY STRATEGIES FOR A TWO-STAGE DUAL-CHANNEL SUPPLY CHAIN

Asia Pacific Journal of Operational Research ◽

10.1142/s0217595912400040 ◽

2012 ◽

Vol 29 (01) ◽

pp. 1240004 ◽

Cited By ~ 11

Author(s):

RUN H. NIU ◽

XUAN ZHAO ◽

IGNACIO CASTILLO ◽

TARJA JORO

Keyword(s):

Supply Chain ◽

Wholesale Price ◽

Product Line ◽

Two Stage ◽

Web Based ◽

Dual Channel ◽

Eoq Model ◽

Joint Pricing ◽

Dual Channel Supply Chain ◽

Offline Channels

The Internet is becoming increasingly important as a sales channel. Thus, most large retail firms have adopted a multi-channel strategy that includes both web-based channels and pre-existing offline channels. In this paper, we consider joint pricing and inventory/production decision problems for members in a monopoly two-stage dual-channel retailer supply chain. For a dual-channel retailer, pricing in one channel will affect the demand in the other channel. This subsequently affects the retailer's replenishment (ordering) decisions, which have an impact on the producer's inventory/production plans and wholesale price decisions. It is clear then that pricing decisions and inventory/production decisions are interacting in each member of the supply chain and among the members in the chain as well. In this paper, we analyze joint pricing and inventory/production problems under three scenarios by incorporating intra-product line price interaction in the EOQ model. We show that a unique equilibrium exists under certain realistic conditions. We also provide numerical results that offer insights for pricing strategies for the dual-channel retailer supply chain and for product design for different channels.

Download Full-text

Transfer of Risk in Supply Chain Management with Joint Pricing and Inventory Decision Considering Shortages

Mathematics ◽

10.3390/math9060638 ◽

2021 ◽

Vol 9 (6) ◽

pp. 638

Author(s):

Irfanullah Khan ◽

Biswajit Sarkar

Keyword(s):

Supply Chain ◽

Supply Chain Management ◽

Sensitivity Analyses ◽

Selling Price ◽

Distribution Free ◽

Chain Management ◽

Distribution Free Approach ◽

Joint Pricing ◽

Inventory Decision ◽

The Cost

This study is the first to consider a distribution-free approach in a newsvendor model with a transfer of risk and back-ordering. Previously, in many articles, discrete demand is considered. In this model, we consider a newsvendor selling a single seasonal item with price-dependent stochastic demand. Competition in markets has forced the retailer and manufacturer to coordinate in decentralized supply chain management. A coordination contract is made between a retailer and manufacturer to overcome the randomness of demand for a short-life-cycle product. The retailer pays an additional amount per product to transfer the risk of unsold items. The manufacturer bears the cost of unsold products from the retailer. Shortages are allowed with back-ordering costs during the season. The distribution-free model is developed and solved with only available demand data of mean and standard deviation. Stackelberg’s game approach is used to calculate the optimal ordering quality and price. This model aims to maximize expected profit by optimizing unit selling price and ordered quantity through coordination. To illustrate that the model is robust, numerical experiment and sensitivity analyses are conducted for both decentralized and centralized supply chain management. For applicability of the model in the real-world business scenario, managerial insights are provided with sensitivity analysis.

Download Full-text