Money-back guarantee and personalized pricing in a Stackelberg manufacturer's dual-channel supply chain

2018 ◽  
Vol 197 ◽  
pp. 84-98 ◽  
Author(s):  
Wei Li ◽  
Jing Chen ◽  
Gongqian Liang ◽  
Bintong Chen
Keyword(s):  
Supply Chain ◽  
Dual Channel ◽  
Dual Channel Supply Chain ◽  
Money Back Guarantee

scholarly journals Return Strategies and Online Product Customization in a Dual-Channel Supply Chain

2019 ◽  
Vol 11 (12) ◽  
pp. 3482 ◽  
Author(s):  
Rong Zhang ◽  
Jiatong Li ◽  
Zongsheng Huang ◽  
Bin Liu
Keyword(s):  
Supply Chain ◽  
Consumer Satisfaction ◽  
Channel Selection ◽  
Return Policy ◽  
Dual Channel ◽  
Product Customization ◽  
Dual Channel Supply Chain ◽  
Money Back Guarantee

This paper investigates in a dual-channel supply chain which return strategy is better for the manufacturer that considers the consumers’ utility. We find that a manufacturer prefers offering a Money-Back Guarantee (MBG) as long as the net salvage value of the returned product is positive in a channel. However, the return strategy of the retailer is more affected by the return policy of another channel than the net salvage value. In order to reduce online returns, we propose the online product customization channel, and then, we examine the choice of return policy and the manufacturer’s channel selection. We show that the demand and profit of the manufacturer will increase to a certain extent when opening an online customization channel. However, compared to the case where both channels provide an MBG, the implementation of online customization may hurt the manufacturer’s profits with the increase in consumer satisfaction in indirect channels.

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