Inventory and pricing decisions for a dual-channel supply chain with deteriorating products

He, Yong; Huang, Hongfu; Li, Dong

doi:10.1007/s12351-018-0393-2

Cited by 82 publications

(68 citation statements)

References 73 publications

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“…Proof. Bringing equations (1), (2), and (23) into equations (22) and (24) and let dπ m /dQ m � 0 and zπ r /zQ r � 0, we get equation (27). Proof completed.…”

Section: Lemmamentioning

confidence: 92%

“…Xu et al [17] found that a large number of consumers have heterogeneous preferences for the direct selling channel and the retail selling channel and constructed the channel conflict when the price comparison became the focus of consumers. Other scholars also conducted extensive study in price decision making [18][19][20][21][22][23][24], service decision making [25][26][27], and their coordination [28]. In the aspect of inventory decision making, the literature concerning channel conflicts studied ordering issues in dual-channel supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Zhu et al [33] studied the order decision making of members in a dual-channel supply chain with a risk-neutral manufacturer and a risk-averse retailer, designed a risksharing contract which is a hybrid with multiple contracts, and found that the risk-sharing contract could perform steadily when the market circumstance varies. He et al [24] studied a single-retailer single-vendor dual-channel supply chain model in which the vendor sells deteriorating products through its direct online channel and the indirect retail channel and developed a revenue sharing and two-part tariff contract to coordinate the supply chain. e above-mentioned contract mechanisms were initially designed to coordinate a dual-channel supply chain under capacity certainty.…”

Section: Literature Reviewmentioning

confidence: 99%

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Capacity Allocation and Compensation in a Dual‐Channel Supply Chain under Uncertain Environment

Yang

Zhang

Huang

et al. 2019

Mathematical Problems in Engineering

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The dual-channel supply chain is widely adopted by main manufacturers, potentially incurring channel conflicts between the traditional retail channel which is owned by the independent retailer and the online channel which is directly managed by the manufacturer. The purpose of this paper is to deal with the scenario where channel conflicts may arise under production capacity uncertainty, when the manufacturer tends to privilege the direct selling channel over the retail selling channel. To achieve the goal, this paper establishes a Stackelberg game model consisting of a manufacturer and a retailer, studies the scenario where the manufacturer satisfies the direct selling channel first in the presence of capacity uncertainty, employs the decision optimization and the backward induction method to find the optimal inventory decision in the direct selling channel and the optimal order quantity decision making in the retail selling channel, and designs a compensation mechanism aiming to coordinate the channel conflict in the decentralized decision-making process. Results show that the optimal decisions aiming to maximize the expected profit of each supply chain member are not able to maximize the expected profit of entire dual-channel supply chain. However, when the manufacturer compensates the retailer’s profit loss based on the unsatisfied order and, in the meantime, adjusts the wholesale price to prevent the retailer which obtains the compensation from increasing order significantly, the compensation mechanism can coordinate the decision of each supply chain member, mitigate the channel conflict, maximize the expected profit of entire dual-channel supply chain, and achieve the Pareto improvement of supply chain members’ expected profit in the decentralized decision-making process.

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“…Proof. Bringing equations (1), (2), and (23) into equations (22) and (24) and let dπ m /dQ m � 0 and zπ r /zQ r � 0, we get equation (27). Proof completed.…”

Section: Lemmamentioning

confidence: 92%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Capacity Allocation and Compensation in a Dual‐Channel Supply Chain under Uncertain Environment

Yang

Zhang

Huang

et al. 2019

Mathematical Problems in Engineering

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“…ere are a large number of research studies on the traditional dual-channel supply chain in which a manufacturer has an online channel and the retailer has a physical store channel. ese research studies on the dualchannel supply chain focus on channel selection [13][14][15][16], channel coordination [13,[17][18][19][20], the pricing and other decisions optimization [21][22][23][24][25][26][27], and channel competition [28][29][30]. A comprehensive review of dual-channel supply chains can be found in Tsay and Agrawal [11] and Cai et al [12].…”

Section: Literature Reviewmentioning

confidence: 99%

Pricing Decisions of a Supply Chain with Multichannel Retailer under Fairness Concerns

Zhen

Shi

Tsai

et al. 2019

Mathematical Problems in Engineering

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With the rapid development of the Internet, many traditional retailers have built their online channels. The fairness concern may play an important role in a dual-channel supply chain with a multichannel retailer. This paper establishes a Stackelberg game model in which a manufacturer produces and sells products through direct online channel and a retailer sells directly to consumers through online and offline channels. The manufacturer’s fairness concern (advantageous inequity) and the retailer’s fairness concern (disadvantageous inequity) are considered. Four scenarios are investigated: no fairness concern (NF), the retailer fairness concern (RF), the manufacturer fairness concern (MF), and both the manufacturer and the retailer fairness concern (MRF). The theoretical analysis shows that if the manufacturer’s advantageous inequity concern is low, the profit of the whole supply chain in the MRF scenario is the greatest. Otherwise, the supply chain profit in the NF or RF scenario is the greatest. That is, the manufacturer’s and the retailer’s fairness concern may increase the profit of the supply chain. This study also finds that the manufacturer’s advantageous inequity concern can increase the social welfare. The retailer should not concern about fairness if the manufacturer has high fairness concern. Besides, this paper shows that the manufacturer’s selling price cannot be affected by the fairness concern. Adjusting the wholesale price is the only thing that the manufacturer can do to reduce disadvantageous or advantageous inequity. In the RF scenario, the role of the retailer’s disadvantageous inequity concern is to reallocate the supply chain profit. Our findings provide some managerial insights on the pricing decision when the multichannel retailer and the manufacturer consider the fairness.

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“…Moreover, organic agriculture and organic food are good for human health, such as reducing the risk of allergic disease and of overweight and obesity, with modestly higher contents of phenolic compounds in organic fruit and vegetables [2]. The concentration of antioxidants in service, information sharing and so on [26,[35][36][37]. Similarly, pricing, quality, service, and advertising is also included in the study of the optimal strategy for an omni-channel supply chain [31,38].…”

Section: Introductionmentioning

confidence: 99%

Differential Game Analysis of Optimal Strategies and Cooperation in Omni-Channel Organic Agricultural Supply Chain

2019

Sustainability

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This paper aims to investigate the optimal strategies for both centralized and decentralized modes in a two-echelon omni-channel organic agricultural supply chain (OASC) which consists of one farmer cooperative and one online retailer. Furthermore, the contracts of cooperation between the members in OASC are discussed. Based on both theory differential game and bi-level programming, we utilize the Nerlove–Arrow model and Stackelberg model to examine five cases of decision modes for both agents in the OASC. Then, we achieve the optimal strategies where the specified sets of organic growing effort, organic traceability technology effort, propaganda input, and service input can guarantee the maximization of the related profits. As a result, we could obtain the values of the corresponding optimal profits. For the centralized decision mode, the farmer cooperative and the online retailer make decisions with the goal of maximizing the overall profits of the OASC. Meanwhile, for the decentralized decision mode with four different cases, each member will independently make a decision with the goal of maximizing his own profit respectively. In detail, as for the fully decentralized decision mode, no contracts exist in OASC; regarding the decentralized decision mode with an information traceability cost sharing contract, two members pay the information traceability cost together; and for the decentralized decision mode with a revenue sharing contract, two members share the revenue together; as to the decentralized decision mode with a comprehensive contract, there are two cooperative ways that information traceability cost sharing and revenue sharing can be achieved. In addition, we also considered factors such as the consumer preferences of organic products and the cross influence between channels in models. Finally, through sensitivity analysis and comparison of optimal strategies and profits, we found that: (1) high consumer preferences of organic products and high cross influence between channels are profitable; and (2) the choice of contract is influenced by the relative size of the offline marginal income ratio and the online marginal income ratio.

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Inventory and pricing decisions for a dual-channel supply chain with deteriorating products

Cited by 82 publications

References 73 publications

Capacity Allocation and Compensation in a Dual‐Channel Supply Chain under Uncertain Environment

Capacity Allocation and Compensation in a Dual‐Channel Supply Chain under Uncertain Environment

Pricing Decisions of a Supply Chain with Multichannel Retailer under Fairness Concerns

Differential Game Analysis of Optimal Strategies and Cooperation in Omni-Channel Organic Agricultural Supply Chain

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