Return strategy and pricing in a dual-channel supply chain

Li, Guo; Li, Lin; Sethi, Suresh P.; Guan, Xu

doi:10.1016/j.ijpe.2017.06.031

Cited by 165 publications

(51 citation statements)

References 41 publications

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“…Our work is also related to the literature on dual‐channel supply chain (Chiang et al., ; Kurata et al., ; Chen et al., ; Huang and Swaminathan, ; Yoo and Lee, ; Cao et al., ; Li et al., ; Ni et al., 2017a, 2017b; Xie et al., ; Zhang et al., ; Dzyabura and Jagabathula, ; Modak and Kelle, ). This branch of literature either explores the benefit of a dual‐channel supply chain or studies the optimal operational decisions of members in a dual‐channel supply chain.…”

Section: Literature Reviewmentioning

confidence: 72%

Financing strategies for a capital‐constrained manufacturer in a dual‐channel supply chain

Xiao

2019

Int Trans Operational Res

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This study investigates a co-opetition-type dual-channel supply chain that consists of a competitive supplier (CS) and a capital-constrained manufacturer (CCM). The CCM procures key components from and simultaneously competes with the CS in the consumer market. To address the CCM's capital constraint, we consider three financing strategies, namely, trade credit, bank loan, and hybrid financing (i.e., combined use of bank loan and equity financing). Game models are established to characterize the interactions between the CS and CCM. The corresponding equilibria are derived under each strategy. Then, comparative analyses are conducted, and the CS's and CCM's preference structures regarding the three strategies are revealed. On this basis, the equilibrium strategy can be concluded as either trade credit or hybrid financing, but never bank loan. Specifically, when the equity financing ratio is small or large, trade credit is an equilibrium strategy. When the equity financing ratio is medium, the equilibrium strategy between trade credit and hybrid financing is determined by consumers' product preference and loan interest rate.accounted for a combined shipping volume of over 533 million units in 2017. This value is equivalent to 36.3% of the global smartphone market. 2 Although the two companies are in fierce competition in their industry, they cooperate with each other in many areas. 3 Notably, Samsung has provided Apple with processors and OLED screens for many years. 4 Such "co-opetition" is prevalent in many high-technology industries. Other typical examples are IBM and Cisco. The former purchases network equipment from the latter, while simultaneously competing in the overall server market. 5 The dual-channel supply chain, in which a supplier provides a manufacturer with key components while the two companies compete with each other in the final market, is common in real businesses. However, in practice, certain manufacturers in such dual-channel supply chains may lack capital to support production. For example, the smartphone screens used by Gionee, a well-known smartphone manufacturer in China, have always been provided by Foxconn. However, in recent years, Gionee has encountered capital-shortage problems and sought financing instruments to support its production. Consequently, one of the critical challenges for Gionee is selecting a suitable financing strategy.Accordingly, we extend the current literature by examining a co-opetition-type dual-channel supply chain, which consists of a competitive supplier (CS) and a capital-constrained manufacturer (CCM). The two firms are cooperative in component supply but competitive in the consumer market. Specifically, the CCM procures components from the CS. Meanwhile, the two companies compete by selling substitutable products in the same consumer market. For the capital constraint of the CCM, we consider three financing strategies. In Strategy 1 (trade credit), the CS offers trade credit to the CCM. In Strategy 2 (bank loan), the CCM seeks a bank loan to support its ...

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Section: Literature Reviewmentioning

confidence: 72%

Financing strategies for a capital‐constrained manufacturer in a dual‐channel supply chain

Xiao

2019

Int Trans Operational Res

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“…For example, Mukhopadhyay and Setaputra () model returns as R = ϕ + ψr , where ϕ is a base return amount and ψ denotes customer sensitivity to monetary leniency. Several works, such as Li et al (), Heydari et al (), and Batarfi et al (), express returns volume only as a deterministic fraction of demand without a return‐specific sensitivity parameter, and we therefore classify them as not having a return sensitivity.…”

Section: Analytical Researchmentioning

confidence: 99%

Taking stock of consumer returns: A review and classification of the literature

Abdulla

Ketzenberg

Abbey

2019

J of Ops Management

111

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Coincident with the rapid growth of consumer returns and their corresponding importance in the retail marketplace, academic interest in the area of consumer return policy design has significantly increased. In fact, the growth in academic publications has been tremendous, with almost half of the published works appearing within the past 6 years. The influx of new and evolving research spans across multiple disciplines and various methodologies. To provide clarity for the continued evolution of the field, we provide a comprehensive review and classification of the literature predicated on a holistic conceptual framework. The scope of the review includes all peer reviewed journal articles published prior to the end of 2018, along with any working papers cited therefrom, that specifically address (a) managerial decision‐making related to return policies or (b) consumer behavior in response to such decision‐making. Examining the state of the literature and practice on return policy design through the lens of a unified conceptual framework—a framework that spans both analytical and empirical research—reveals numerous managerial and theoretical opportunities for future research.

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“…The majority of product return literature in B2C (Business-to-Customer) relationships focuses on refund policy. These studies have examined the effect of a refund contract (e.g., no-refund, partial-refund, full-refund policy) on pricing strategy, order decision, performance, and coordination contract by considering different factors [7][8][9][10][11]. The trend of the refund policy is directed from partial refund to full refund.…”

Section: Literature Reviewmentioning

confidence: 99%

A Cross-Channel Return Policy in a Green Dual-Channel Supply Chain Considering Spillover Effect

Zhang

Xia

2020

Sustainability

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With the advent of the era of “New Retail”, many manufacturers and retailers have begun to provide cross-channel return services to increase competitiveness. Our study takes return policy into a green dual-channel supply chain, wherein a manufacturer creates and sells green products simultaneously. We investigate the pricing and greening strategies for the supply chain players in the cases of providing and not providing cross-channel return service by employing the Stackelberg model under the hypothesis of a consistent pricing strategy. By comparing the equilibrium results of two cases, we find that the retailer will cooperate with the manufacturer to employ the cross-channel return policy when the spillover effect is greater than a threshold. Additionally, the green level of products is higher than before. The threshold decreases with consumers’ sensitivity to green products, which implies that the manufacturer is motivated to conduct marketing programs to enhance consumers’ willingness to buy green products. Moreover, we propose a contract to coordinate the supply chain. Finally, we discuss the scenarios if the supply chain implements a differential pricing strategy. Interestingly, the green level and the profits of the whole supply chain are greater than that under a consistent pricing strategy. However, the profits of the retailer are lower than profits in the other scenario, which is not beneficial to creating a stable green supply chain.

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Return strategy and pricing in a dual-channel supply chain

Cited by 165 publications

References 41 publications

Financing strategies for a capital‐constrained manufacturer in a dual‐channel supply chain

Financing strategies for a capital‐constrained manufacturer in a dual‐channel supply chain

Taking stock of consumer returns: A review and classification of the literature

A Cross-Channel Return Policy in a Green Dual-Channel Supply Chain Considering Spillover Effect

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