Price competition and coordination of dual-channel supply chains
by Chunhua Tang; Taosheng Wang
International Journal of Networking and Virtual Organisations (IJNVO), Vol. 13, No. 4, 2013

Abstract: The dual-channel is a more prevalent channel structure in current marketing systems, it including the traditional retail channel and the direct channel through web-based sales. And price competition and channel conflict are inevitable between retail channel and the manufacturer's direct sale channel. This paper develops pricing decisions and coordination models in a one-manufacturer-one retailer dual-channel supply chain. We fully characterise partners' optimal decisions by adopting a customer's utility function. We discuss the optimal decisions in decentralised dual-channel supply chain including market-like setting without revenue sharing contract and contract-like setting, and obtain the optimal prices and quantity decisions in centralised and decentralised dual-channel supply chain. Moreover, we propose the feasible revenue-sharing contracts to coordinate the dual-channel supply chain, and obtain the optimal parameters of the revenue sharing contract. It is always beneficial for both the partners and system to adopt a revenue sharing contract. Finally, the proposed models are further analysed through numerical examples.

Online publication date: Sat, 06-Sep-2014

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