The dual channel supply chain coordination considering retailer's sale effort under uniformly distributed demand
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Assuming that retailers were facing uniformly distributed market demand and the retailer's sales effort and dual channel sale prices were related to the market demand,and considering the dual channel supply chain composed of a single manufacturer and a single retailer,this paper,by establishing dual channel supply chain model,analyzed the sales efforts,the retail price,direct selling price and order quantity in the dual channel supply chain under centralized decision,and proposed the conditions to coordinate the dual channel supply chains.The results show that:the contract combining rebate-penalty contract and buy-back contract could not coordinate the dual channel supply chains,while that with the revenue sharing strategy added to the contract combining rebate-penalty contract and buy-back contract could achieve the coordination of the dual channel supply chains.Finally,the results were verified through numerical calculation.Keywords:
Revenue Sharing
Channel Coordination
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Consider: retailers develop online channel under traditional sales channel. Based on game theory,the paper studied the coordination strategy of dual-channels closed-loop supply chain when the retailer collects useless products. By the analysis and the compares with optimal price strategy and profit of supply chain system in decentralized decision model and centralized decision model,it indicated that the supply chain system in decentralized decision model does not reach the hoptimality. In order to achieve profit maximization of the whole supply chain system,a retailer revenue-cost-sharing contact is proposed. Finally,the validity of the proposed contract models is illustrated by a numerical example.
Revenue Sharing
Profit maximization
Profit sharing
Maximization
Decision model
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Stackelberg competition
Channel Coordination
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This paper explores characteristics of three different channel structures of three-echelon supply chain, namely a traditional retail channel; a manufacturer's dual-channel and a retailer's dual-channel. In the dual-channel setting, a manufacturer operates retail channel through a distributor and a retailer while either the manufacturer or the retailer operates the direct e-channel. Mathematical models for both non-cooperative and cooperative decisions are developed. Optimal pricing policies of all the proposed models are analyzed with theory. It has been showed that in three echelon supply chain, introduction of dual channel is not always profitable for the channel members compared to single retail channel. Optimal price of the product is always greater in single retail channel compared to retail prices in both the dual channels. To eliminate channel conflicts of non-cooperative supply chain, a two-way price discount mechanism is used to coordinate both the dual channels. It is analytically found that the retailer has opportunity to gain more profits in own dual-channel and in non-cooperative single retail channel instead of manufacturer dual channel. The distributor also prefers the retailer's dual-channel compared to the manufacturer's dual-channel. All analytical results are illustrated numerically.
Distributor
Channel Coordination
Stackelberg competition
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Stackelberg competition
Value (mathematics)
Channel Coordination
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In a coordinated supply chain composed of a supplier and a retailer with revenue sharing contract,the switching fraction of demand is nonlinear in competitive environment.This paper identifies the condition under which supplier opens up a direct channel when the product is substituted.The optimal price on direct channel,the optimal quantity of production for supplier and the optimal quantity of order for retailer in dual channel supply chain are investigated.The analysis suggests that adding a direct channel will increase profit of supplier and supply chain when the cost of construction is in some boundary.However,it will decrease the retailer's profit.The case and numerical analysis show that a revenue sharing contract of direct channel can be proposed to decrease channel conflict,improve the whole system's profit and coordinate the supply chain.
Channel Coordination
Revenue Sharing
Profit sharing
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Purpose The aim of this paper is to investigate the effect of information asymmetry on revenue sharing contracts and performance in a dual-channel supply chain. First, the authors model the optimum revenue sharing contract in a dual-channel supply chain under both the full information case and the asymmetric information case. Second, they contrast the optimal decisions of a dual-channel supply chain between the full information case and the asymmetric information case. Third, they explore the impact of asymmetric cost information on the performance of a dual-channel supply chain and investigate the information value. Design/methodology/approach The authors present two main issues associated with revenue sharing contracts to alleviate manufacturer–retailer conflicts in a dual-channel supply chain. In the first issue, a revenue sharing contract is designed in a dual-channel supply chain under asymmetric cost information conditions, based on the principal-agent model. In the second issue, an optimal revenue sharing contract under full information conditions, based on the Stackelberg game is discussed. They explore the impact of asymmetric cost information on the performance of a dual-channel supply chain and investigate the information value based on comparative static analysis. Findings First, the direct sale price is unchanged and independent of the retailer’s cost construct, but the wholesale price increases and the retail sale price does not decrease under asymmetric cost information. The information asymmetry leads to higher direct sale demand and lower retail sale demand. Second, information asymmetry is beneficial for the retailer, but imposes inefficiency on the manufacturer and the whole supply chain. Third, the performance of the dual-channel supply chain is improved if the retailer’s cost information is shared and the dual-channel supply chain reaches coordination. The retailer is willing to share its cost information if the lump sum side payment that the manufacturer offers can make up the retailer’s reduced profit due to sharing this information. Originality/value The authors proposed a contract menus design model in a dual-channel supply chain. They examine how information asymmetry affects optimal policies and performance. They compared the optimal policies under symmetric information and asymmetric information. Conditions under which the partners prefer sharing information are identified. They quantified the information value from the points of partners and the whole system.
Revenue Sharing
Stackelberg competition
Information Sharing
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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.
Revenue Sharing
Channel Coordination
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Channel Coordination
Stock (firearms)
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The effort of supply chain members is one of important factors which influence market demand.Considering a supply chain with a manufacturer,a distributor and a retailer who faces a stochastic demand depending on sales efforts,we study how to use revenue-sharing contract to coordinate the supply chain.Firstly,the constraint of the optimal order quantity and the optimal effort is determined with the channel coordinating the supply chain.We then analyze the impact of effort on supply chain coordination based on revenue-sharing contract and show why revenue-sharing contract cannot coordinate supply chain in that case.To deal with the problem,the revenue-sharing contract based on rebate and penalty policy is proposed.Coordination is achieved by implementing revenue-sharing contract based on rebate and penalty policy in one transaction or two transactions of three-level supply chain.In fact,the former is a special case of the latter.By assuming that the relationship between demand and effort satisfies addition form,we also provide an approach to define the optimal contract parameters.
Revenue Sharing
Channel Coordination
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The paper studied the coordination of a three-level supply chain made up of one manufacturer, one distributor and one retailer under the random demand. Firstly, the optimal order quantity is determined with the channel coordination of the supply chain; Secondly, the paper designs a combined contract (rebate-penalty contract & revenue-sharing contract, RP-RS) to coordinate the supply chain, namely, manufacturer offers distributor a rebate-penalty contract and distributor offers retailer a revenue-sharing contract. The paper validates that RP-RS contract can coordinate the three-level supply chain by choosing reasonable parameters. The reasonable choice of parameters can attain the win-win good among all business members, which will help to improve the decision-making capacity and competive ability of businesses involved in the supply chain, and the sizes of parameters in a reasonable range relate to the bargaining position of a business.
Revenue Sharing
Distributor
Channel Coordination
Position (finance)
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