scholarly journals Profit maximization models for a two-level dual-channel supply chain

2021 ◽  
Author(s):  
Raaid Batarfi
Keyword(s):  
Supply Chain ◽  
Profit Maximization ◽  
Channel Structure ◽  
Supply Chain System ◽  
Model Studies ◽  
Return Policy ◽  
Dual Channel ◽  
Before And After ◽  
Online Channel ◽  
Inventory Decisions

Internet-based technologies have changed the way firms do business and manage their supply chains. They have influenced customers’ purchase patterns, thereby motivating manufacturers to introduce online channels alongside traditional ones. Such structures are known as dual-channels. Nowadays, an increasing number of manufacturers offer a return policy to attract more customers and to stay competitive. Furthermore, learning-based continuous improvements help firms cope with market changes and be competitive, flexible and efficient. This thesis presents three main models: The first model investigates the effect of adopting a dual-channel (comprised of a retail channel and an online channel) on the performance of a two-level (vendor-retailer) supply chain. The objective is to maximize the total profit of the system by finding the optimal markup margin and inventory decisions before and after adopting the dual-channel. The results show that adding an online channel would increase the profit of the system. However, it creates a conflict due to competition between the retail and online channels. The second model studies a supply chain system, which is comprised of production, refurbishing, collection, and waste disposal processes. A return policy in which customers can return the purchased item for a refund is also considered. The purpose is to examine the effect of different return policies on the behavior of the system before and after adopting the dual-channel strategy. In both strategies, the model analyzes the change in the profit, the pricing and inventory decisions. The findings demonstrate that the more generous the return policy is, the higher the demand, the selling prices and the overall profit. The third model investigates the effects of learning and forgetting in the vendor’s production processes. It also considers single- and dual-channel strategies. Each channel structure can adopt any of six inventory policies. Learning and forgetting effects are considered in all policies except one. The objective is to maximize the profit of the system by finding the joint optimal pricing and inventory decisions. The results suggests that learning, despite being impeded by forgetting, reduces inventory-related costs thereby allowing the chain to reduce the prices of its product(s), which increases demand and subsequently sales.

scholarly journals Profit maximization models for a two-level dual-channel supply chain

2021 ◽  
Author(s):  
Raaid Batarfi
Keyword(s):  
Supply Chain ◽  
Profit Maximization ◽  
Channel Structure ◽  
Supply Chain System ◽  
Model Studies ◽  
Return Policy ◽  
Dual Channel ◽  
Before And After ◽  
Online Channel ◽  
Inventory Decisions

Internet-based technologies have changed the way firms do business and manage their supply chains. They have influenced customers’ purchase patterns, thereby motivating manufacturers to introduce online channels alongside traditional ones. Such structures are known as dual-channels. Nowadays, an increasing number of manufacturers offer a return policy to attract more customers and to stay competitive. Furthermore, learning-based continuous improvements help firms cope with market changes and be competitive, flexible and efficient. This thesis presents three main models: The first model investigates the effect of adopting a dual-channel (comprised of a retail channel and an online channel) on the performance of a two-level (vendor-retailer) supply chain. The objective is to maximize the total profit of the system by finding the optimal markup margin and inventory decisions before and after adopting the dual-channel. The results show that adding an online channel would increase the profit of the system. However, it creates a conflict due to competition between the retail and online channels. The second model studies a supply chain system, which is comprised of production, refurbishing, collection, and waste disposal processes. A return policy in which customers can return the purchased item for a refund is also considered. The purpose is to examine the effect of different return policies on the behavior of the system before and after adopting the dual-channel strategy. In both strategies, the model analyzes the change in the profit, the pricing and inventory decisions. The findings demonstrate that the more generous the return policy is, the higher the demand, the selling prices and the overall profit. The third model investigates the effects of learning and forgetting in the vendor’s production processes. It also considers single- and dual-channel strategies. Each channel structure can adopt any of six inventory policies. Learning and forgetting effects are considered in all policies except one. The objective is to maximize the profit of the system by finding the joint optimal pricing and inventory decisions. The results suggests that learning, despite being impeded by forgetting, reduces inventory-related costs thereby allowing the chain to reduce the prices of its product(s), which increases demand and subsequently sales.

scholarly journals Research on Supply Chain Stability Driven by Consumer’s Channel Preference Based on Complexity Theory

Complexity ◽  
2018 ◽  
Vol 2018 ◽  
pp. 1-13 ◽  
Author(s):  
Yi Tian ◽  
Junhai Ma ◽  
Wandong Lou
Keyword(s):  
Supply Chain ◽  
Pricing Strategy ◽  
Largest Lyapunov Exponent ◽  
Dynamic Features ◽  
Chaotic State ◽  
Supply Chain System ◽  
Dual Channel ◽  
Channel Preference ◽  
Online Channel ◽  
Simulation Results

At present, most of the manufacturers are increasingly laying emphasis on dual-channel selling. The level of consumer’s preference is diverse with different channels. This study discusses a supply chain where one common manufacturer uses two different channels to sell product. The bounded rationality expectation has been applied to explore the decision-making mechanism in finalizing the wholesale prices and sales commissions for the manufacturer and retailers. In addition, the dynamic features of the system are simulated by 2D bifurcation diagram, the largest Lyapunov exponent, attractor variation, and time series. The simulation results suggest that if the adjustment speeds of the wholesale prices and sales commissions change drastically, the system would fall into a chaotic state. If the consumers prefer the online channel, the wholesale prices and sales commissions may be raised and vice versa. However, too strong preference of each channel will make the system appear to have a considerably periodic fluctuation, even chaos. In the meantime, the parameter adjustment method can help make the periodic or chaotic system go back to stability. Therefore, the significance of this study is with a practical meaning to make better pricing strategy for players in dual-channel selling supply chain system.

scholarly journals The Entropy Complexity of an Asymmetric Dual-Channel Supply Chain with Probabilistic Selling

Entropy ◽  
2018 ◽  
Vol 20 (7) ◽  
pp. 543 ◽  
Author(s):  
Yimin Huang ◽  
Qiuxiang Li
Keyword(s):  
Supply Chain ◽  
Stable State ◽  
Channel Structure ◽  
Flip Bifurcation ◽  
Supply Chain System ◽  
Chain System ◽  
Dual Channel ◽  
Decision Variables ◽  
The Stability ◽  
Dual Channel Supply Chain

Considering consumers’ attitudes to risks for probabilistic products and probabilistic selling, this paper develops a dynamic Stackelberg game model of the supply chain considering the asymmetric dual-channel structure. Based on entropy theory and dynamic theory, we analyze and simulate the influences of decision variables and parameters on the stability and entropy of asymmetric dual-channel supply chain systems using bifurcation, entropy diagram, the parameter plot basin, attractor, etc. The results show that decision variables and parameters have great impacts on the stability of asymmetric dual-channel supply chains; the supply chain system will enter chaos through flip bifurcation or Neimark–Sacker bifurcation with the increase of the system entropy, and thus the system is more complex and falls into a chaotic state, with its entropy increased. The stability of the system can become robust with the increase of the probability that product a becomes a probabilistic product, and it weakens with the increase of the risk preference of customers for probabilistic products and the relative bargaining power of the retailer. A manufacturer using the direct selling channel may obtain greater profit than one using traditional selling channels. Using the method of parameter adjustment and feedback control, the entropy of the supply chain system will decline, and the supply chain system will fall into a stable state. Therefore, in the actual market of probabilistic selling, the manufacturers and retailers should pay attention to the parameters and adjustment speed of prices and ensure the stability of the game process and the orderliness of the dual-channel supply chain.

scholarly journals Impact of Retailer’s Vertical and Horizontal Fairness Concerns on Manufacturer’s Online Channel Mode

2021 ◽  
Vol 2021 ◽  
pp. 1-12
Author(s):  
Xuemei Zhang ◽  
Chenhao Ma ◽  
Haoran Chen ◽  
Guohu Qi
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Channel Structure ◽  
Direct Selling ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Online Channel ◽  
Channel Mode ◽  
Dual Channel Supply Chain ◽  
The Impact

This paper investigates a dual-channel supply chain consisting of a manufacturer and a retailer, where the retailer exhibits vertical and horizontal fairness concerns. The manufacturer or the retailer direct selling and e-commerce platform agency selling modes are employed to characterize the impact of retailer’s fairness concerns on the online channel mode strategy. Results show that the retailer’s fairness concerns only affect the wholesale price and online channel mode strategy. Without the retailer’s fairness concerns, the manufacturer direct selling mode is the best strategy for the manufacturer, which harms the retailer’s utility. With the retailer’s fairness concerns, the manufacturer may choose the manufacturer direct selling or e-commerce platform agency selling mode. When the fairness concern parameters meet a certain range, the e-commerce platform agency selling mode strategy is better for the supply chain members, which can solve the interest conflict between supply chain members. These research findings help dual-channel supply chain members understand how to choose the channel structure strategy to balance the supply chain members’ interests by considering fairness concerns.

scholarly journals Dual channel supply chain (DCSC) model with a product return policy considered

2021 ◽  
Author(s):  
Yuni Setiawati ◽  
Ririn Setiyowati ◽  
Supriyadi Wibowo
Keyword(s):  
Supply Chain ◽  
Return Policy ◽  
Product Return ◽  
Dual Channel ◽  
Dual Channel Supply Chain

Advertising strategy and contract coordination for a supply chain system: immediate and delayed effects

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hui Yu ◽  
Wei Yang ◽  
Na Xu ◽  
Yang Du
Keyword(s):  
Supply Chain ◽  
Profit Maximization ◽  
Chain Structure ◽  
Transfer Payment ◽  
Supply Chain System ◽  
Content Type ◽  
Delayed Effects ◽  
Advertising Effect ◽  
Chain System ◽  
Advertising Strategy

PurposeAfter receiving advertising messages, most consumers rarely purchase the advertised products at once, which results in a delay between advertising exposure and its effect. This paper is devoted to exploring the advertising decision and coordination issues for a supply chain system subject to advertising immediate and delayed effects.Design/methodology/approachBy applying the game theory, the differential game models with delay are constructed for the supply chain to examine the equilibrium advertising efforts, brand goodwill and the optimal profits under the different cooperation situations. A class of transfer payment contracts is designed to achieve the best outcome of the supply chain. Illustrative examples are given to demonstrate the effectiveness of addressed results and provide some managerial perspectives.FindingsIt can be found that the complete cooperation situation can stimulate the advertising investment, drive the product demand and improve the economic profit. Also, a class of transfer payment contracts is designed in this paper, such that the supply chain can perfectly realize the profit maximization, and each member can achieve the Pareto improvement.Research limitations/implicationsThis work does not address the random market environment, which can be filled in the future. Furthermore, this paper has been done in a single supply chain structure. It is an interesting future line of research when taking competitive behavior (e.g. competition among manufacturers, retailers or supply chains) into account.Practical implicationsThis study will help managers make advertising strategies, advise an optimal cooperation way and design the coordination contracts to ensure the economic development of the supply chain. These obtained conclusions may provide a valuable decision-support for marketing management.Originality/valueFor a supply chain, the most previous literature about dynamic advertising models focused on a single advertising effect-immediate effect. This work explores advertising strategy with double advertising effects and investigates the coordinating power of new transfer payment contracts.

scholarly journals Green Manufacturing Strategy Considering Retailers’ Fairness Concerns

2019 ◽  
Vol 11 (17) ◽  
pp. 4646 ◽  
Author(s):  
Zhang ◽  
Zhang ◽  
Pu ◽  
Li
Keyword(s):  
Supply Chain ◽  
Positive Impact ◽  
Green Manufacturing ◽  
Optimal Decision ◽  
Manufacturing Strategy ◽  
Supply Chain System ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Fairness Concern ◽  
High Level

This paper addresses the problem of green manufacturing decision making for a green dual-channel supply chain (SC). In the investigated SC, the manufacturer will decide whether to adopt green manufacturing under the influence of the retailer’s fairness concern-based dual-channel. Thus, we discuss two decision scenarios: the no green manufacturing strategy with retailer fairness (NM model), and green manufacturing with retailer fairness (GM model). Our study has several findings: Firstly, adopting a green manufacturing strategy is not always beneficial to supply-chain members when a retailer has fairness. In particular, when fairness is at a relatively high level, the manufacturer will not adopt green manufacturing. Secondly, under green manufacturing, the product’s green degree and subsidies have a positive impact on the price and demand and the members’ profit and utility. Besides, the subsidies and retailer fairness have a counter effect on the optimal decision. Thirdly, comparing the two scenarios (NM & GM), we found that the channel price of the GM model is lower than the NM model. Finally, from the perspective of the supply chain system, the system tends toward the manufacturer adopting green manufacturing and maintaining retailer fairness concerns at a lower level.

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.

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