Assembly system with omnichannel coordination

Assembly system with omnichannel is rarely studied in literature. This paper explores the equilibrium and coordination issues for an omnichannel assembly system. Four different game-theoretical model types applying four operational strategies - a total of sixteen analytical models - are developed and analyzed for both omnichannel and pure channel modes. The numerical analysis of an electronic product assembly system provides a clearer understanding of the solutions and their effects on the profits in the assembly system for different model types and operational strategies. A further sensitivity analysis with focus on an omnichannel with offline channel subsidy (OMS) creates better insights regarding how changes of key parameters affect the assembly system profits. It is found that the omnichannel mode with or without offline channel subsidy can deliver much better operational performance to the assembly system via mutual fusion effect than that of a pure online- or offline-channel mode. Furthermore, the offline channel subsidy can amplify to a very large extent the mutual fusion effect to increase the product demand dramatically and thus improving the operational performance of the assembly system in the omnichannel business scenario. The best operational strategy for the assembly system in the omnichannel business scenario is the coordination strategy with offline channel subsidy.