Adjusted-Stackelberg scheme in applying profit-sharing to coordinate dual channel supply chain
by Erwin Widodo; I Nyoman Pujawan; Budi Santosa
Asian J. of Management Science and Applications (AJMSA), Vol. 1, No. 1, 2013

Abstract: Dual channel supply chain (DCSC), a structure of simultaneous sales through conventional store and online facility has been gaining popularity. However, besides its potential, DCSC also comes with its inner-competition, i.e., between incumbent conventional store and newly introduced online facility. This situation leads to the necessity of an effective coordination mechanism. We propose an approach of profit sharing based on an adjusted-Stackelberg-equilibrium result on DCSC prices. Our approach is simply practical unlike the complicated full-coordination of Bertrand scheme but is able to offer higher total DCSC profit than the original Stackelberg scheme.

Online publication date: Fri, 18-Jul-2014

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