Ordering Decision and Coordination of a Dual-Channel Supply Chain with Fairness Concerns Under an Online-to-Offline Model

Abstract

We introduce reference dependence to describe the fairness utility functions of channel members and model a dual-channel supply chain (one manufacturer and one retailer) in three scenarios: only the manufacturer is concerned with fairness, only the retailer is concerned with fairness, and both parties are concerned with fairness. The ordering decisions and coordination of a dual-channel supply chain under the online-to-offline (O2O) business model are studied. Nash equilibrium solutions exist for the channel order quantities in all three scenarios, and the inventory transshipment strategy can be used to coordinate the dual-channel supply chain under the O2O business model. Numerical examples are used to analyze the effectiveness and feasibility of coordination. The inventory transshipment strategy can be used to directly coordinate the dual-channel supply chain when only the manufacturer is concerned with fairness. The retailer feels unfair in the other two scenarios, which affects cooperation. To maintain cooperation with the retailer and achieve optimal supply chain efficiency and channel coordination, the manufacturer must compensate the retailer or choose one with fewer expectations regarding its channel status or fewer fairness concerns.

Pricing and Channel Coordination in Online-to-Offline Supply Chain Considering Corporate Environmental Responsibility and Lateral Inventory Transshipment

“…To better position our study in the extant literature, we compare the closely related literature with our study in Table 1 with respect to the following key features, i.e., onlineto-offline supply chain, pricing, coordination, corporate environmental responsibility, and lateral inventory transshipment. It is necessary to point out that, the key reference literatures in our study are [14] and [23]. Our study has essential difference from them, i.e., our study considers corporate environmental responsibility, and pays attention to the decision on the corporate environmental responsibility level.…”

“…For studies on online-to-offline supply chain coordination, for examples, Yu et al [23] studied ordering decisions and coordination with fairness concerns in the dual-channel supply chain. They found that inventory transshipment strategy can realize coordination under O2O business model.…”

Research on Supply Chain Coordination Decision Model Based on Green Technology

“…The enterprise economic level and product greenness of decentralized scenario (DS and DM) and cost sharing contract scenario (DS-CP, DS-CM and DM-CP) are compared. The parameters in the model are assigned as follows (Yu et al, 2019):…”

Channel Contract Coordination for Supply Chain With Behavior Preferences Under Uncertainties

“…In the green clothing supply chain, Adhikari and Bisi [8] explored the impact of fairness concerns on greening quality and profitability of the supply chain under the green cost sharing and revenue-sharing contract ， and showed that fairness concerns would reduce the green level. Yu et al [9] investigated ordering strategies in a dual-channel supply chain context with three scenarios: manufacturer with fairness concerns, retailer with fairness concerns, and bidirectional fairness concerns, for a dual-channel supply chain context, and used an inventory parceling strategy to achieve dual-channel supply chain coordination. Zhang and Li [10]discussed the impact of manufacturer fairness concerns and whether retailers consider manufacturer fairness concerns on supply chain greenness in a green closed-loop supply chain, and supply chain coordination was achieved using revenue sharing contracts.…”