Title: Maximising manufacturer's profit in a dual-channel supply chain with disruption risk

Authors: Chieh Lee; Xun Xu; Chia-Chi Hsu

Addresses: Department of Industrial Engineering and Management, Yuan Ze University, 135 Yuan-Tung Road, Chung-Li, 32003, R.O.C., Taiwan ' Department of Management, Operations, and Marketing, College of Business Administration, California State University, Stanislaus, One University Circle, Turlock, CA 95382, USA ' Department of Industrial Engineering and Management, Yuan Ze University, 135 Yuan-Tung Road, Chung-Li, 32003, R.O.C., Taiwan

Abstract: With the rapid development of the e-commerce, more customer demands are generated through online sales channels. Together with traditional sales channels through retailers, the manufacturers need to implement the dual supply chain management to enhance their performance. However, both of the online and traditional sales channels might face various sources of disruption risks under the globalisation and the high complexity of the supply chain network. Using a theoretical modelling approach, three industrial cases, and sensitivity analysis, we discuss the optimal pricing strategy of manufacturer in the dual channel supply chain with disruption risks. We find that the influential factors of maximising profits of a manufacturer include its pricing strategy, product market share, disruption risk probabilities, and product distribution proportion between the online and offline channels.

Keywords: supply chain management; dual channel; supply chain risk; pricing; disruption risk.

DOI: 10.1504/IJSOM.2019.100972

International Journal of Services and Operations Management, 2019 Vol.33 No.3, pp.351 - 368

Received: 14 Feb 2017
Accepted: 29 May 2017
Published online: 22 Jul 2019 *

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