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1 – 10 of 300
Article
Publication date: 2 October 2017

Honglin Yang, Erbao Cao, Kevin Jiang Lu and Guoqing Zhang

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…

Abstract

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.

Details

Journal of Business & Industrial Marketing, vol. 32 no. 8
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 25 September 2019

Abhishek Sharma and Deepika Jain

The purpose of this paper is to investigate the impact of fairness concerns of the retailer on the pricing policies of the supply chain partners, their individual profits…

Abstract

Purpose

The purpose of this paper is to investigate the impact of fairness concerns of the retailer on the pricing policies of the supply chain partners, their individual profits, and the overall performance of a dual-channel supply chain composed of one manufacturer and one retailer. First, the authors model the dual-channel supply chain under retailer’s fairness concern. Second, the authors derive the optimal pricing policies of the channel members. Third, the authors analyze the effects of retailer’s fairness and bargaining power on the pricing strategies and profit functions of the dual-channel supply chain system.

Design/methodology/approach

The authors adopt the manufacturer-led Stackelberg game theoretic framework, where the dominant manufacturer’s pricing decisions are based on the retailer’s pricing decision. The paper considers Nash bargaining solution as the fairness reference point to formulate the utility function of the fair-retailer. The paper uses this approach because it endogenously accounts for the competitive power and cooperative contribution of the channel members when they interact.

Findings

The authors find that the retailer’s fairness concerns are not always beneficial for its better performance. If the retailer is moderately sensitive towards its fairness, it will positively influence its performance. However, if the fairness concern becomes too high then it will negatively impact the retailer’s performance because it results in customers’ migration towards direct online channel for buying the products. In addition, if the retailer’s fairness concerns are mild, the manufacturer’s prices will decrease in retailer’s bargaining power, which is opposite otherwise.

Originality/value

The authors use Nash bargaining solution model as the fairness reference in the context of dual-channel supply chain, which is comparatively a recent approach and has been used independently from dual-channel supply chain system.

Details

Journal of Business & Industrial Marketing, vol. 35 no. 2
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 16 November 2015

Feng Yang, Pei Hu, Fuguo Zhao and Cuihua Hu

The purposes of this paper is to propose a customer returns model in a dual-channel supply chain where a customer can return the purchased product to the retailer or the…

Abstract

Purpose

The purposes of this paper is to propose a customer returns model in a dual-channel supply chain where a customer can return the purchased product to the retailer or the manufacturer and obtain an equilibrium of selling prices and refund prices and the optimal profit when considering customer returns in the centralized and decentralized dual-channel supply chain.

Design/methodology/approach

This paper mainly uses the game theory technique to analyze the problem. The manufacturer and the retailer are vertically integrated in the traditional channel, and the results of the centralized dual-channel supply chain are obtained. Then, the Stackelberg game was adopted to analyze the decentralized dual-channel supply chain. Finally, the detailed numerical simulation is proposed to obtain straight-forward insights for the industrial managers.

Findings

The mathematic analysis used shows that the main findings of this paper are: in the centralized scenario, the retailer and the manufacturer will charge higher selling prices when they offer return policy, and the demand for each channel increases, which results in higher profit; and the price and refund price of the direct channel in the centralized and decentralized dual-channel are the same, respectively.

Originality/value

Most previous literatures highlight that return policy plays an important role in supply chain which considering one channel. But there is no study on the customer return policy in dual-channel supply chain. This paper is a further step to model the effects of customer returns policy on the pricing policy and optimize the profits in a dual-channel supply chain. This paper analyzes the pricing and refund strategies and gets an equilibrium in the centralized and decentralized dual-channel supply chain scenarios.

Details

Journal of Modelling in Management, vol. 10 no. 3
Type: Research Article
ISSN: 1746-5664

Keywords

Article
Publication date: 14 June 2019

Zonghuo Li, Wensheng Yang, Xiaohong Liu and Hassan Taimoor

This paper aims to investigate the impact of retailer innovation investment and its spillover’s effect on competitive dual-channel supply chain pricing and optimization…

Abstract

Purpose

This paper aims to investigate the impact of retailer innovation investment and its spillover’s effect on competitive dual-channel supply chain pricing and optimization strategy, and explore the coordination mechanism considering decision maker’s bargaining ability.

Design/methodology/approach

The Cournot and Stackelberg game methodology are made use of for the duopoly decentralized and joint decision-making model. The bargaining theory with different negotiation ability was used to analysis the coordination mechanism. Then this paper validates the model by simulation techniques.

Findings

The results enlightened some interesting facts, the increase in innovation demand coefficient spur rise in channel pricing, innovation investment level, supply chain profit and consumer welfare. The rise in innovation spillover coefficient leads to increase in online channel pricing, supply chain profit and consumer welfare. Due to the innovation spillover effect, retailer has to maintain channel competitiveness either through low price or high innovation investment strategies. In addition, online channel pricing, supply chain profit and consumer welfare in joint decision-making scenario is greater than that of decentralized decision-making scenario, while the difference in retailer channel pricing depends on parameters value. The increase in retailer’s joint negotiation factor leads to decrease in channel pricing and innovation investment level. Furthermore, there existence of an optimal innovative investment cost sharing proportion threshold indicates the achievement of dual-channel supply chain coordination. A refinement equilibrium can be achieved through Robinstein bargaining game. A larger interest discount factor leads to decrease in profit.

Originality/value

The research provides a theoretical reference for dual-channel supply chain pricing and coordination strategy under channel competition environment. The research can develop innovative investment strategies for retailers and implement response strategies for manufacturers.

Details

Kybernetes, vol. 49 no. 6
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 11 September 2017

Lingcheng Kong, Zhiyang Liu, Yafei Pan, Jiaping Xie and Guang Yang

The online direct selling mode has been widely accepted by enterprises in the O2O era. However, the dual-channel (online/offline, forward/backward) operations of the…

1315

Abstract

Purpose

The online direct selling mode has been widely accepted by enterprises in the O2O era. However, the dual-channel (online/offline, forward/backward) operations of the closed-loop supply chain (CLSC) changed the relationship between manufacturers and retailers, thus resulting in channel conflict. The purpose of this paper is to take a dual-channel operations of CLSC as the research target, where a manufacturer sells a single product through a direct e-channel as well as a conventional retail channel; the retailer are responsible for collecting used products in the reverse supply chain and the manufacturer are responsible for remanufacturing.

Design/methodology/approach

The authors build a benchmark model of dual-channel price and service competition and take the return rate, which is considered to be related to the service level of the retailer, as the function of the service level to extend the model in the reverse SC. The authors then analyze the optimal pricing and service decision under centralization and decentralization, respectively. Finally, with the revenue-sharing factor, wholesale price and recycling price transfer payment coefficient as contract parameters, the paper also designs a revenue-sharing contract led by the manufacturer and explores in what situation the contract could realize the Pareto optimization of all players.

Findings

In the baseline model, the results show that optimal price and service level correlate positively in centralization; however, the relation relies on consumers’ price sensitivity in decentralization. In the extension model, the relationship between price and service level also relies on the relative value of increased service cost and remanufacturing saved cost. When the return rate correlates with the service level, a recycling transfer payment can elevate the service level and thus raise the return rate. Through analyzing the parameters in revenue-sharing contract, a point can be reached where lowering the wholesale price and raising the transfer payment coefficient will promote retailers to share revenue.

Practical implications

Many enterprises establish the dual-channel distribution system both online and offline, which need to understand how to resolve their channel conflict. The conflict is especially strong in CLSC with remanufacturing. The result helps the node enterprises realize the coordination of the dual-channel CLSC.

Originality/value

It takes into account the fact that there are two complementary relationships, such as online selling and offline delivery; used product recycling and remanufacturing. The authors optimize the strategy of product pricing and service level in order to solve channel conflict and double marginalization in the closed-loop dual-channel distribution network.

Details

Industrial Management & Data Systems, vol. 117 no. 8
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 10 August 2021

Zonghuo Li, Wensheng Yang and Yinyuan Si

This paper investigates a dual-channel supply chain in which a manufacturer offers coupons in the online channel and the retailer in the offline channel. The optimal…

Abstract

Purpose

This paper investigates a dual-channel supply chain in which a manufacturer offers coupons in the online channel and the retailer in the offline channel. The optimal pricing and coupon promotion policies are explored, and the brand image under different promotion scenarios is studied.

Design/methodology/approach

Three differential game models, namely no coupon is offered, coupons offered by the manufacturer and coupons offered by the retailer, are constructed.

Findings

The results show that the manufacturer and retailer intend to conduct coupon promotions under a large coupon redemption rate. Coupon promotion derives a higher price and profit for the issuers, and the manufacturer can free-ride on the retailer's coupon promotion. The retailer's profit in the retailer-promotion scenario may be lower than that in the manufacturer-promotion scenario in some special conditions. Besides, price, coupon face value, brand image and profit increase over time. After multiple cycles game, the operational strategy evolves to an optimal equilibrium status.

Originality/value

This paper provides guidance and advice for dual-channel supply enterprises to implement joint pricing and coupon promotion strategies under multiple sales seasons.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 14 May 2018

Subrata Saha, Nikunja Mohan Modak, Shibaji Panda and Shib Sankar Sana

This paper aims to explore optimal pricing policies and characteristics of a two-level dual-channel supply chain under price- and delivery time-sensitive demand. Besides…

Abstract

Purpose

This paper aims to explore optimal pricing policies and characteristics of a two-level dual-channel supply chain under price- and delivery time-sensitive demand. Besides price of the product, the delivery lead time is also a crucial factor in customers’ purchase decisions. A longer delivery lead time would diminish customers’ acceptance and faithfulness on the online channel, while a shorter delivery lead time would lead to incorporation of a substantial amount of logistics costs. In formulation of mathematical model, the effects of delivery lead time on the manufacturer and the retailer’s pricing strategies and profits in cooperative and non-cooperative dual-channel supply chain are explained analytically.

Design/methodology/approach

The analytical models are formed for both non-cooperative and cooperative scenarios under inconsistent and consistent pricing. The authors examine whether revenue sharing (RS) contract or delivery cost sharing contract can solely coordinate the dual-channel supply chain. If a single contract fails, then the combination of RS contract with delivery cost sharing to achieve channel coordination is discussed.

Findings

It is found that the RS or delivery cost sharing contract cannot coordinate the channel individually but revenue and delivery cost sharing contract jointly coordinate the channel. All analytical results are illustrated numerically, along with sensitivity analysis.

Research limitations/implications

There are many correlated issues that need to be further investigated. First, one good extension to this research may include the consideration of the channel structure with competitive retailers. It will be interesting to analyze the performance of coordination mechanisms by considering the retailer as a Stackelberg leader in retailing.

Originality/value

The findings and subsequent methodological discussions aim to provide practical guidance to retailers who are allowing customers to choose how, when and where they interact and purchase by offering a combination of websites (fully functional and mobile-enabled), catalogs and stores with increasing convergence of channels.

Details

Journal of Modelling in Management, vol. 13 no. 2
Type: Research Article
ISSN: 1746-5664

Keywords

Article
Publication date: 15 June 2021

Rufeng Wang, Zhiyong Chang and Shuli Yan

The purpose of this paper is to investigate the pricing strategy and the impact of agents' risk preference in a dual-channel supply chain in which both agents are risk-averse.

Abstract

Purpose

The purpose of this paper is to investigate the pricing strategy and the impact of agents' risk preference in a dual-channel supply chain in which both agents are risk-averse.

Design/methodology/approach

The authors make use of the mean-variance (MV) method to measure the risk aversion of the agents and apply Stackelberg game to obtain the optimal strategies of the proposed models. Furthermore, the authors compare the optimal strategies with that in the benchmark model in which no agent is risk-averse.

Findings

The authors find that the pricing decisions can be divided into four categories according to the risk attitudes of the agents: the decisions that are independent of two agents' risk attitudes, the decisions that depend on only one agent’s risk attitude (i.e. depend on only manufacturer's risk attitude and depend on only retailer's risk attitude) and the decisions that depend on both agents' risk attitudes. In addition, the authors find that the retail price will be lower and the wholesale price in most cases will be lower than that in the benchmark when at least one agent's risk control is effective; the demand will be always increasing as long as one agent's risk control is effective. Furthermore, compared to the benchmark, a win-win strategy (i.e. Pareto improvement) for the supply chain members can be obtained in a certain range where the agents' risk controls are appropriate.

Originality/value

This research provides a theoretical reference for the managers to make the pricing decisions and the risk control in dual-channel supply chains with heterogeneous preference consumers.

Details

Kybernetes, vol. 51 no. 4
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 13 August 2019

Chao Yu, Chuanxu Wang and Suyong Zhang

This paper aims to analyze the impact of the cost coefficient of product emission reduction, coefficient of low-carbon product advertising effort cost, and sharing ratio…

Abstract

Purpose

This paper aims to analyze the impact of the cost coefficient of product emission reduction, coefficient of low-carbon product advertising effort cost, and sharing ratio of low-carbon product advertising effort cost on the profit of a dual-channel supply chain. After determining the best model and relevant influencing factors, the paper puts forward corresponding management inspirations and suggestions.

Design/methodology/approach

The paper opts for an exploratory study using Stackelberg game theory to construct a centralized decision-making (MC mode), a low carbon product advertising effort cost free sharing decentralized decision-making (SD model) and a low carbon product advertising effort cost sharing decentralized decision-making (JD model) game model. Through using optimization methods to get the equilibrium solution, the relevant management suggestions are obtained by comparison analysis.

Findings

The paper shows that the JD model is better than the SD model in terms of the profits of the manufacturer, retailer and supply chain, and the improvement of Pareto is realized. The proportion of cost sharing of low carbon product advertising effort is positively related to the wholesale price and direct influence coefficient of low carbon product advertising effort on channel, while negatively related to the retail price and the cross influence coefficient of low carbon product advertising effort on alternative channels. Under the JD model, the manufacturer can reduce advertising costs through improving the efficiency and pertinence of direct channel advertising and urging the retailer to do a better job in sales management to improve gross margin and require the retailer to increase advertising efficiency and pertinence of retail channel to reduce advertising costs of retail channel and other ways to increase their profits. The retailer can make use of its advantages closer with consumers to improve the efficiency and pertinence of advertising in the retail channel to raise the influence coefficient of advertising and reduce the advertising cost in the retail channel.

Originality/value

The innovations of this paper are listed as follows: First, it has considered advertising investment from both the manufacturer and the retailer simultaneously. Second, it has considered a low-carbon background to investigate cooperative advertising decision for low-carbon products. Third, it has considered the decision on the level of product emission reduction and the level of low-carbon product advertising effort investment simultaneously.

Article
Publication date: 31 July 2020

Yong Liu, Zhi-yang Liu and Jiao Li

The purpose of this paper is an attempt to design a proper incentive coordination mechanism to deal with the channel conflicts between the traditional sales and online…

Abstract

Purpose

The purpose of this paper is an attempt to design a proper incentive coordination mechanism to deal with the channel conflicts between the traditional sales and online direct sales.

Design/methodology/approach

With respect to the problems of channel conflicts between the traditional sales and online direct sales, to optimize the sale system and get more profits, considering the influences of consumer network acceptance, the authors establish demand and profit function based on consumer's utility, respectively. What's more, we exploit the game theory to analyze the optional decisions of the supply chain under the incentive coordination condition and no incentive coordination condition, and then we discuss the supply chain's optimal pricing, demand, profit and compensation incentive levels with the different effect of consumer network acceptance.

Findings

The level of compensation incentive provided by the manufacturer is influenced by consumer network acceptance and product cost. The lower the consumer network acceptance, the better the compensation incentive coordination effect of manufacturers. Manufacturers, wholesalers, retailers and consumers are all important players in real supply chain relationships. When a manufacturer exists as a dominant role, it should pay full attention to the impact of consumer behavior on supply chain decisions.

Practical implications

The research can clarify the influence and mechanism of consumer behavior on supply chain channel conflict coordination, and deal with channel conflicts.

Originality/value

The proposed incentive coordination can effectively realize supply chain channel conflict resolution, and provide decision-making ideas and methods for manufacturers to develop the supply chain management of online direct sales channels.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 33 no. 3
Type: Research Article
ISSN: 1355-5855

Keywords

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