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

Abstract

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 dualchannel 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.

Modeling the Incentive Mechanism of Information Sharing in a Dual-Channel Supply Chain

“…D-S evidence synthesis method is used to conduct information fusion processing for each representative's score. Multiple pieces of evidence (multiple evaluation information) are systematically processed to generate basic probability distribution function and comprehensive evaluation value, as shown in formula (1). Finally, the comprehensive evaluation value weighting of multiple representatives for a certain subject of a supply chain project on all indicators is added up, that is, converted into points.…”

“…Producers, suppliers, wholesalers, retailers, and e-commerce of agricultural products have mastered agricultural demand, supply, inventory, forecast, logistics, and other information resources. Only through information interconnection and effective sharing can enterprises trust each other, accurately judge the market, timely grasp the demand, adjust sales strategies, improve the overall efficiency of the supply chain, avoid blind supply and supply interruptions caused by information asymmetry, and avoid the phenomenon of "difficult to sell and expensive to buy" of agricultural products [1]. Information sharing is beneficial for the agricultural products supply chain as a whole, but information sharing has great risks for a single subject.…”

“…At present, the research on the incentive mechanism of information sharing in single-channel or dual-channel agricultural supply chain mainly focuses on trust mechanism, revenue sharing contract, risk assessment, and so on. Research methods such as game model and CVaR criterion have been used, and preliminary results have been achieved [1][2][3][4][5][6][7][8][9][10][11][12][13][14][15]. Based on the innovative methods in the field of engineering technology, this paper uses the TRIZ theory to carry out research on the incentive mechanism of information sharing.…”

The Dual-Channel Retailer’s Channel Synergy Strategy Decision

“…Previous studies on channel synergy mainly focused on this field. Scholars propose many channel synergy strategies, such as cooperative advertising strategy [17,18], lateral transshipment strategy [19][20][21], and information sharing strategy [22][23][24]. They all found that in some cases, these channel synergy strategies can improve the performance of manufacturer and retailer simultaneously.…”

Vertical Cost-Information Sharing in a Food Supply Chain with Multiple Unreliable Suppliers and Two Manufacturers

“…For example, Yao et al [30] explored cost-information sharing in a SC by considering value-added costs as retailers' private information. Liu et al [31] examined the interplay between VCIS and channel choices. Kostamis and Duenyas [32] investigated the value of both cost and demand information sharing.…”