Managing a retailer’s dual-channel supply chain under price- and delivery time-sensitive demand

2018 ◽  
Vol 13 (2) ◽  
pp. 351-374 ◽  
Author(s):  
Subrata Saha ◽  
Nikunja Mohan Modak ◽  
Shibaji Panda ◽  
Shib Sankar Sana
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Lead Time ◽  
Channel Structure ◽  
Analytical Models ◽  
Delivery Time ◽  
Delivery Cost ◽  
Content Type ◽  
Dual Channel ◽  
Dual Channel Supply Chain

Purpose This paper aims to explore optimal pricing policies and characteristics of a two-level dual-channel supply chain under price- and delivery time-sensitive demand. Besides price of the product, the delivery lead time is also a crucial factor in customers’ purchase decisions. A longer delivery lead time would diminish customers’ acceptance and faithfulness on the online channel, while a shorter delivery lead time would lead to incorporation of a substantial amount of logistics costs. In formulation of mathematical model, the effects of delivery lead time on the manufacturer and the retailer’s pricing strategies and profits in cooperative and non-cooperative dual-channel supply chain are explained analytically. Design/methodology/approach The analytical models are formed for both non-cooperative and cooperative scenarios under inconsistent and consistent pricing. The authors examine whether revenue sharing (RS) contract or delivery cost sharing contract can solely coordinate the dual-channel supply chain. If a single contract fails, then the combination of RS contract with delivery cost sharing to achieve channel coordination is discussed. Findings It is found that the RS or delivery cost sharing contract cannot coordinate the channel individually but revenue and delivery cost sharing contract jointly coordinate the channel. All analytical results are illustrated numerically, along with sensitivity analysis. Research limitations/implications There are many correlated issues that need to be further investigated. First, one good extension to this research may include the consideration of the channel structure with competitive retailers. It will be interesting to analyze the performance of coordination mechanisms by considering the retailer as a Stackelberg leader in retailing. Originality/value The findings and subsequent methodological discussions aim to provide practical guidance to retailers who are allowing customers to choose how, when and where they interact and purchase by offering a combination of websites (fully functional and mobile-enabled), catalogs and stores with increasing convergence of channels.

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

Kybernetes ◽  
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.

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

2020 ◽  
Vol 12 (6) ◽  
pp. 2296 ◽  
Author(s):  
Zhou Xideng ◽  
Xu Bing ◽  
Xie Fei ◽  
Li Yu
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Service Quality ◽  
Product Quality ◽  
Cost Sharing ◽  
Supply Chain System ◽  
Optimal Decisions ◽  
Dual Channel ◽  
Reference Quality ◽  
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.

scholarly journals Research on Cost Information Sharing and Channel Choice in a Dual-Channel Supply Chain

2016 ◽  
Vol 2016 ◽  
pp. 1-12 ◽  
Author(s):  
Huihui Liu ◽  
Shuguang Sun ◽  
Ming Lei ◽  
G. Keong Leong ◽  
Honghui Deng
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Channel Structure ◽  
General Distribution ◽  
Cost Information ◽  
Direct Sales ◽  
Channel Choice ◽  
Dual Channel ◽  
The Cost ◽  
Dual Channel Supply Chain

Many studies examine information sharing in an uncertain demand environment in a supply chain. However there is little literature on cost information sharing in a dual-channel structure consisting of a retail channel and a direct sales channel. Assuming that the retail sale cost and direct sale cost are random variables with a general distribution, the paper investigates the retailer’s choice on cost information sharing in a Bertrand competition model. Based on the equilibrium outcome of information sharing, the manufacturer’s channel choice is discussed in detail. Our paper provides several interesting conclusions. In both single- and dual-channel structures, the retailer has little motivation to share its private cost information which is verified to be valuable for the manufacturer. When the cost correlation between the two channels increases, our analyses show that the manufacturer’s profit improves. However, when channel choice is involved, the value of information could play a different role. The paper finds that a dual-channel structure can benefit the manufacturer only when the cost correlation is sufficiently low. In addition, if the cost correlation is weak, the cost fluctuation will bring out the advantage of a dual-channel structure and adding a new direct channel will help in risk pooling.

scholarly journals Optimal channel decision of retailers in the dual-channel supply chain considering consumer preference for delivery lead time

2020 ◽  
Vol 15 (4) ◽  
pp. 453-466
Author(s):  
Y.S. Hu ◽  
L.H. Zeng ◽  
Z.L. Huang ◽  
Q. Cheng
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Time Preference ◽  
Consumer Preference ◽  
Optimal Pricing ◽  
Online Retail ◽  
Dual Channel ◽  
Retail Channel ◽  
Dual Channel Supply Chain ◽  
Preference Coefficient

Facing competition from manufacturers' online direct channels, how retailers make sales channel decisions to increase consumer stickiness has become the core concern of the industry and academia. Empirical research showed that delivery lead time is a key factor that affects consumers' preference for online channels. To analyze the impact of consumer delivery time preference on channel selection and pricing strategy of retailers, consumer delivery lead time preference function was improved from a linear function to an exponential function and consumer demand under the mixed dual-channel supply chain of manufacturer and retailer was derived. Then, the Stackelberg game models under different channel strategies of retailer were established and solved. Results show that consumer preference for delivery lead time has four implications on the channel decision of retailers under manufacturer encroachment in the dual-channel supply chain. First, the dual retail channels strategy is the optimal choice for retailers, and the profit margins that a retailer obtains from dual retail channels supply chain and single online retail channel supply chain will increase as consumers' delivery lead time preference coefficient increases. Second, the optimal pricing of online retail channel and offline retail channel is positively related to consumers' delivery lead time preference coefficient. By contrast, the optimal pricing of online direct channel is negatively related to consumers' delivery lead time preference coefficient. Third, the optimal pricing of online retail channel is higher than that of offline retail and online direct channels. Fourth, a retailer and a manufacturer can adopt a compensation-based whole price contract to address the conflict brought about by the optimal channel choice of the retailer. This study introduces consumer delivery lead time preference into retailer channel decision making and provides a theoretical reference for retailer's mixed channel construction in practice.

scholarly journals Model Three-Level Dual-Channel Supply Chain pada Sistem Sentralisasi dengan Memertimbangkan Waktu Tunggu Pengiriman

d'CARTESIAN ◽  
2020 ◽  
Vol 9 (1) ◽  
pp. 72
Author(s):  
Shinta Nur Pratiwi Ramadhani ◽  
Ririn Setiyowati ◽  
Titin Sri Martini
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Nonlinear Function ◽  
Optimal Solution ◽  
Global Market ◽  
Centralize System ◽  
Dual Channel ◽  
Total Profit ◽  
Online Channel ◽  
Dual Channel Supply Chain

AbstrakEra pasar global telah mengubah kebiasaan konsumen dalam membeli produk, sehingga konsumen dapat membeli produk melalui media online. Oleh karena itu, produsen mengembangkan media penjualannya melalui media online dan offline. Pada penelitian ini dikembangkan model three-level dual-channel supply chain dengan memertimbangkan waktu tunggu pengiriman pada penjualan melalui media online yang dilakukan oleh produsen serta mengembangkan media penjualan distributor sehingga distributor dapat menjual produk secara langsung ke konsumen. Konstruksi model bertujuan untuk mengoptimalkan keuntungan gabungan produsen, distributor, dan pengecer dengan sistem sentralisasi. Fungsi keuntungan gabungan merupakan fungsi nonlinear tanpa kendala dengan tiga variabel keputusan yaitu harga jual produsen pada media online, harga jual distributor langsung ke konsumen, dan harga jual pengecer ke konsumen. Selanjutnya, ditentukan solusi optimal model berdasarkan syarat perlu dan syarat cukup untuk fungsi multivariabel tanpa kendala. Berdasarkan simulasi numerik dan analisis sensitivitas dapat dilihat pengaruh faktor waktu tunggu pengiriman terhadap fungsi keuntungan gabungan yang optimal. Ditunjukkan bahwa lamanya waktu tunggu pengiriman sangat berpengaruh pada besarnya keuntungan optimal gabungan produsen, distributor, dan pengecer.Kata Kunci: Sentralisasi, Three-Level, Waktu TungguAbstractThe global market era changes the consumer behavior to shop the product, so the consumer can buy through online channel. Therefore, the producer develop the selling channel to sell their products through online channel and offline channel. In this research, we develop the three-level dual-channel supply chain by notice delivery lead time in the online channel used by the producer and develop selling channel from distributors so distributors can sell their product to consumer with direct selling. We construct the model with profit maximization motive of the system that consists producer, distributors, and retailer in the centralize system. The total profit function is nonlinear function without constrains with three decision variables. Furthermore, we determine the optimal solution of the model based on necessary and sufficient condition. Based on numerical simulations and sensitivity analysis we analyze the effect of delivery lead time strongly influences the optimal total profit system.Keywords: Centralize, Lead Time, Three-Level

scholarly journals Price, delivery time and retail service sensitive dual channel supply chain

2019 ◽  
Vol 0 (0) ◽  
pp. 0-0
Author(s):  
Brojeswar Pal ◽  
Leopoldo Eduardo Cardenas-Barron ◽  
Kripasindhu Chaudhuri
Keyword(s):  
Supply Chain ◽  
Delivery Time ◽  
Dual Channel ◽  
Retail Service ◽  
Dual Channel Supply Chain

The pricing strategy of dual-channel supply chain with risk-averse agents and heterogeneous preference consumers

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rufeng Wang ◽  
Zhiyong Chang ◽  
Shuli Yan
Keyword(s):  
Supply Chain ◽  
Risk Control ◽  
Optimal Strategies ◽  
Risk Attitude ◽  
Risk Attitudes ◽  
Risk Averse ◽  
Content Type ◽  
Dual Channel ◽  
Heterogeneous Preference ◽  
Dual Channel Supply Chain

PurposeThe purpose of this paper is to investigate the pricing strategy and the impact of agents' risk preference in a dual-channel supply chain in which both agents are risk-averse.Design/methodology/approachThe authors make use of the mean-variance (MV) method to measure the risk aversion of the agents and apply Stackelberg game to obtain the optimal strategies of the proposed models. Furthermore, the authors compare the optimal strategies with that in the benchmark model in which no agent is risk-averse.FindingsThe authors find that the pricing decisions can be divided into four categories according to the risk attitudes of the agents: the decisions that are independent of two agents' risk attitudes, the decisions that depend on only one agent’s risk attitude (i.e. depend on only manufacturer's risk attitude and depend on only retailer's risk attitude) and the decisions that depend on both agents' risk attitudes. In addition, the authors find that the retail price will be lower and the wholesale price in most cases will be lower than that in the benchmark when at least one agent's risk control is effective; the demand will be always increasing as long as one agent's risk control is effective. Furthermore, compared to the benchmark, a win-win strategy (i.e. Pareto improvement) for the supply chain members can be obtained in a certain range where the agents' risk controls are appropriate.Originality/valueThis research provides a theoretical reference for the managers to make the pricing decisions and the risk control in dual-channel supply chains with heterogeneous preference consumers.

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