Coordinated Drop Shipping Commitment Contract in Dual-Distribution Channel Supply Chain

2012 ◽  
Vol 10 (4) ◽  
pp. 19-30 ◽  
Author(s):  
Jinshi Zhao ◽  
Yongrui Duan ◽  
Shijin Wang ◽  
Jiazhen Huo
Keyword(s):  
Supply Chain ◽  
General Trend ◽  
Distribution Channel ◽  
Customer Acquisition ◽  
Order Quantity ◽  
Terminal Position ◽  
Dual Channel ◽  
Dual Distribution ◽  
Fast Moving Consumer Goods ◽  
Demand Information

It is a general trend for retailers to develop dual channel to serve different customers. Engaging in internet and drop shipping has raised serious awareness and attention in the retailing field. Retailers are competing for dominance from suppliers using terminal position in many industries like appliance and fast moving consumer goods. In this paper, the authors examine such supply chain context and propose the commitment contracts for the drop shipping supply chain. In a drop-shipping model, the retailer focuses on marketing and customer acquisition, so it has more customer demand information than the supplier. To optimize profit, the retailer usually sends over-estimated demand information to the supplier. On the contrary, the supplier has to design a contract to control such a behavior of the retailer. Their study is to optimize the profit of the supplier and the whole supply chain using the commitment contract that can coordinate the retailer and the supplier in dual-channel and drop-shipping supply chain. If the retailer’s order quantity achieves centralized level, the profit of the supply chain can be maximized.

Studying the Complexity of Multichannel Supply Chain with Different Power Structures Under Carbon Subsidy Policy

2021 ◽  
Vol 31 (11) ◽  
pp. 2150166
Author(s):  
Junhai Ma ◽  
Yi Tian ◽  
Liu Chengjin
Keyword(s):  
Supply Chain ◽  
Low Carbon ◽  
Order Quantity ◽  
Power Structures ◽  
Bifurcation And Chaos ◽  
Supply Chain System ◽  
Subsidy Policy ◽  
Subsidy Rate ◽  
Dual Channel ◽  
The Government

The game characteristics and equilibrium strategies of a triple-channel supply chain under the carbon subsidy policy are studied in this work with three different game power structures. There are simultaneous decision-making, manufacturer-dominated market and retailer-dominated market. The decision mechanism for order quantity of manufacturer and dual-channel retailer, is discussed. Meanwhile, their complex dynamic characteristics are studied. It is found that when the government implements dual low-carbon subsidies, the supply chain system in which the manufacturer dominates the market is more stable. The government should pay attention to the power structure of the market to determine an appropriate subsidy rate. The over-adjustment of order quantity from manufacturer’s direct sales channel and retailer’s online channel both will lead to large periodical fluctuations in the system, and even bifurcation and chaos. These will cause substantial fluctuations and even loss in the profits of supply chain companies. This analysis shows that delayed feedback can effectively stabilize the periodic bifurcation and chaos in the system.

scholarly journals Low Carbon Distribution Channel Coordination with a Capital-Constrained Retailer

2018 ◽  
Vol 2018 ◽  
pp. 1-13 ◽  
Author(s):  
Jun Wang ◽  
Xianxue Cheng ◽  
Shuhua Zhang
Keyword(s):  
Supply Chain ◽  
Distribution Channel ◽  
Carbon Price ◽  
Green Technology ◽  
Low Carbon ◽  
Order Quantity ◽  
Carbon Distribution ◽  
Supply Chain Efficiency ◽  
Reduce Emissions ◽  
The Government

Capital constraints exist in many supply chains. We examine a low carbon distribution channel that consists of a manufacturer and a retailer, in which the retailer is constrained by capital. The retailer can be financed by bank credit from a competitive bank market. A Stackelberg model is developed to analyze the integrated decision-making process of ordering, financing, and emission reduction. By comparing the decentralized and centralized channels, we obtain that the manufacturer’s green technology investment should be linearly proportional to the retailer’s order quantity in both channels. Thus, a large order quantity leads to increased efforts to reduce emissions. Results further show that the centralized channel in some cases has fewer emissions and can generate more profits for the whole supply chain compared with the decentralized channel. We therefore propose a revenue sharing contract with a function form to coordinate the distribution channel. When the government allocates appropriate quotas to the supply chain, high carbon price can benefit the environment and supply chain efficiency.

scholarly journals FOOD SUPPLY CHAIN PLAYERS: WITH DIRECT AND TRADITIONAL CHANNELS

2017 ◽  
Vol 5 (6) ◽  
pp. 189-195
Author(s):  
N. Arunfred ◽  
D. Kinslin
Keyword(s):  
Supply Chain ◽  
Agricultural Products ◽  
Direct Channel ◽  
Order Quantity ◽  
Dual Channel ◽  
Dual Channels ◽  
The Difference ◽  
Optimum Solution ◽  
Dual Channel Supply Chain ◽  
Overall Effectiveness

We study a dual channel supply chain in perishable agricultural products. In which one channel is producer (farmer) sells the produce directly to the customer and the other channel is about transfer of produce to different channel players and reach the final customer. Consumers choose the purchase channel based on price, availability, accessibility, product quality, trust-ability and service qualities. The producer decides the price of the direct channel and the intermediaries decides both price and order quantity in the traditional method. We show that the difference in problem faced by the producers’ of the two channels plays an important role in determining the existence of dual channels in equilibrium. For the study Erode and Kanyakumari districts were chosen purposively. A sample of 80 farmers was selected randomly who are involved in both of the channels. In the case that the producer and the retailer coordination and to follow a centralized decision approach, we find that a direct channel will be an optimum solution for improving the overall effectiveness. Our results show that an increase in retailer’s service quality may increase the producer’s profit in dual channel and a larger range of consumer service sensitivity may benefit both parties in the dual channel. The results suggest that both the channel have problem and the optimum solution lies in between two channels.

Optimal pricing strategy in uncertain dual distribution channel with retail services

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Saied Farham-Nia ◽  
Alireza Ghaffari-Hadigheh
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Distribution System ◽  
Uncertainty Theory ◽  
Distribution Channel ◽  
Pricing Strategy ◽  
Optimal Pricing ◽  
Content Type ◽  
Dual Distribution ◽  
Retail Services

Purpose The aim of this paper is to study the optimal pricing decision in a supply chain with a dual distribution channel in a centralized and decentralized decision-making systems and investigate the economic impact of retail services on pricing behaviors with respect to the power structures. Design/methodology/approach To reach the equilibrium behavior of decision-makers, two-stage optimization, the Stackelberg game and the Bertrand–Nash game have been used. Also, to explore the effect of environmental uncertainty on the behavior of decision-maker, demand functions are characterized as an uncertain price dependent, service dependent and channel dependent. Decision parameters are based on experts’ belief degree, in the sense of uncertainty theory initiated by Liu (2007). Findings Obtained results reveal that the retail services have a strategic role in the centralized supply chain and the decentralized supply chain with dominant manufacturer, while both the supply chain and the consumer suffer from higher environmental indeterminacy. Research limitations/implications This study is based on possible scenarios of dual distribution system only. Further research is recommended to investigate the applicability of the authors framework in different distribution systems. Practical implications The study findings are believed to be valuable for supply chains and organizations about to make a strategic decision on price of their good/service. Originality/value The paper contributes to the scarce literature on Uncertainty Theory initiated by Liu (2007), and combination of it with Game Theory for pricing in distribution system of supply chains. The study also contributes by investigating impact of non-price competitive factor (level of service) on pricing strategy.

The impact of firms’ social ties with customers on dual-channel supply chains

2019 ◽  
Vol 38 (6) ◽  
pp. 777-796
Author(s):  
Wei Wei ◽  
Shue Mei ◽  
Jiameng Yang ◽  
Zhiyong John Liu
Keyword(s):  
Social Media ◽  
Supply Chain ◽  
Social Ties ◽  
Wholesale Price ◽  
Information Service ◽  
Distribution Channel ◽  
Retail Price ◽  
The Other ◽  
Content Type ◽  
Dual Channel

Purpose More and more firms are utilizing social media as a distribution channel to sell products. By establishing business accounts on social media firms provide information service to strengthen their relationship with customers and boost sales. The purpose of this paper is to investigate the pricing, information service provision and channel strategies of firms who sell products through social media. Design/methodology/approach The authors use a game theoretical model to study a dual-channel supply chain consisting of one manufacturer and one retailer. Two scenarios are considered – under one scenario the manufacturer and under the other the retailer, respectively, solely provides information service. Both firms’ pricing decisions and profits are compared. Findings The authors find that in the dual-channel model with either the manufacturer or the retailer providing information service to enhance the demand: a firm that has stronger social ties with customers is willing to provide more information services; when the manufacturer provides information service, it charges a direct price higher than the wholesale price, and whether the direct-channel price exceeds the retail price depends on the strength of the manufacturer’s social ties with customers; when the retailer provides information service, the direct price is equal to the wholesale price, both lower than the retail price; and a firm always prefers itself rather than the other firm to provide information service. However, the whole supply chain is better off if the manufacturer rather than the retailer provides information service. Research limitations/implications Besides the relationship between firms and customers, the peer relationship among customers also impacts the supply chain performance, which might be studied in the future. Originality/value The study is novel in theoretically exploring the influence of firms’ social relationship with customers on firms’ pricing and channel strategies.

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