Impact of introducing a direct channel on supply chain performance

We construct a dual channel (direct and retailer-intermediated) supply chain model in this paper that captures key attributes of the relationship between a manufacturer and a retailer, and present thorough analysis to understand how different channel characteristics influence the supply chain equilibrium behaviours. Our analysis shows the specific conditions that each party is better off or worse off in a dual-channel system, and when channel conflicts exist, if they do, when they are solvable and when they are not. The managerial insights gained from this study can serve as practical guidelines for supply chain firms utilising the dual channel strategy.