Price, delivery time, and retail service sensitive dual-channel supply chain

Document Type : Article

Authors

1 Department of Mathematics, The University of Burdwan, Burdwan - 713104, India

2 Department of Industrial and Systems Engineering, School of Engineering and Sciences, Tecnologico de Monterrey. E. Garza Sada 2501 Sur, C. P. 64849, Monterrey, Nuevo Leon, Mexico

3 Department of Mathematics, Jadavpur University, Kolkata - 700032, India

Abstract

This study deals with a dual channel supply chain where selling price of each player, delivery
time for direct channel and retail service dependent demand structures are considered for
manufacturer and retailer. In the direct channel, the manufacturer sells the products directly
to the customers with a maximum mentioned delivery time. The delivery time of the products
is adjustable according to customers’ demand with extra delivery charge. In the retail channel,
the customers are extra benefited by the retail service and direct connection with the products.
Selling price for direct market is considered as lower than the retail market selling price. The
behavior of the model under integrated system is analyzed. In the decentralized structure,
vertical Nash and manufacturer Stackelberg models are also discussed. The sensitivity of the
key parameters is examined to test feasibility of the model. Finally, a numerical example with
graphical illustrations is provided to investigate the proposed model.

Keywords

Main Subjects


References   1. Choi, S.C. Price competition in a channel structure   with a common retailer", Marketing Science, 10(4),   pp. 271{296 (1991).   2. Choi, S.C. Price competition in a duopoly common   retailer channel", Journal of Retailing, 72(2), pp. 117{   134 (1996).   3. Chiang, W.K., Chhajed, D., and Hess, J.D. Direct   marketing, indirect pro_ts: A strategic analysis of dual   channel supply-chain design", Management Science,   49(1), pp. 1{20 (2003).   4. Cai, G.S. Channel selection and coordination in dualchannel   supply chains", Journal of Retailing, 86, pp.   22{36 (2010).   5. Bin, L., Rong, Z., and Meidan, X. Joint decision on   production and pricing for online dual channel supply   chain system", Applied Mathematical Modelling, 34,   pp. 4208{4218 (2010).   1778 B. Pal et al./Scientia Iranica, Transactions E: Industrial Engineering 28 (2021) 1765{1779   6. Hua, G., Wang, S., and Cheng, T.C.E. Price and   lead time decisions in dual-channel supply chains",   European Journal of Operational Research, 205, pp.   113{126 (2010).   7. Huang, S., Yang, C., and Zhang, X. Pricing and   production decisions in dual-channel supply chains   with demand disruptions", Computers & Industrial   Engineering, 62, pp. 70{83 (2012).   8. Xu, H., Liu, Z.Z., and Zhang, S.H. A strategic   analysis of dual-channel supply chain design with price   and delivery lead time considerations", International   Journal of Production Economics, 139, pp. 654{663   (2012).   9. Chen, J., Zhang, H., and Sun, Y. Implementing   coordination contracts in a manufacturer Stackelberg   dual-channel supply chain", Omega, 40, pp. 571{583   (2012).   10. Dan, B., Xu, G., and Liu, C. Pricing policies in   a dual-channel supply chain with retail services",   International Journal of Production Economics, 139,   pp. 312{320 (2012).   11. Xu, G., Dan, B., Zhang, X., and Liu, C. Coordinating   a dual-channel supply chain with risk-averse under   a two-way revenue sharing contract", International   Journal of Production Economics, 147, pp. 171{179   (2014).   12. Chen, K.Y., Kaya, M., and  Ozer,  O. Dual sales   channel management with service competition", Manufacturing   & Service Operations Management, 10(4),   pp. 654{675 (2008).   13. Kurata, H., Yao, D.Q., and Liu, J.J. Price policies   under direct vs. indirect channel competition and national   vs. store brand competition", European Journal   of Operational Research, 180, pp. 262{281 (2007).   14. Cao, E., Ma, Y., Wan, C., and Lai, M. Contracting   with asymmetric cost information in a dual-channel   supply chain", Operations Research Letters, 41, pp.   410{414 (2013).   15. Wang, W., Li, G., and Cheng, T.C.E. Channel selection   in a supply chain with a multi-channel retailer:   The role of channel operating costs", International   Journal of Production Economics, 173, pp. 54{65   (2016).   16. Kolay, S. Manufacturer-provided services vs. Retailerprovided   services: E_ect on product quality, channel   pro_ts and consumer welfare", International Journal   of Research in Marketing, 32(2), pp. 124{154 (2015).   17. Xiao, T. and Shi, J. Pricing and supply priority in   a dual-channel supply chain", European Journal of   Operational Research, 254(3), pp. 813{823 (2016).   18. Matsui, K. When should a manufacturer set its   direct price and wholesale price in dual-channel supply   chains?", European Journal of Operational Research,   258(2), pp. 501{511 (2017).   19. Chen, J., Liang, L., Yao, D.- Q., and Sun, S. Price   and quality decisions in dual-channel supply chains",   European Journal of Operational Research, 259(3), pp.   935{948 (2017).   20. Li, G., Li, L., Sethi, S.P., and Guan, X. Return   strategy and pricing in a dual-channel supply chain",   International Journal of Production Economics, 215,   pp. 153{164 (2019).   21. Wang, L., Song, H., andWang, Y. Pricing and service   decisions of complementary products in a dual-channel   supply chain", Computers & Industrial Engineering,   105, pp. 223{233 (2017).   22. Mozafari, M., Karimi, B., and Mahootchi, M. A   di_erential Stackelberg game for pricing on a freight   transportation network with one dominant shipper and   multiple oligopolistic carriers", Scientia Iranica, 23(5),   pp. 2391{2406 (2016).   23. Zhou, Y.-W., Guo, J., and Zhou, W. Pricing/service   strategies for a dual-channel supply chain with free   riding and service-cost sharing", International Journal   of Production Economics, 196, pp. 198{210 (2018).   24. Jiaping, X., Weisi, Z., Ling, L., Yu, X., Jun, Y., and   Guang, Y. The revenue and cost sharing contract of   pricing and servicing policies in a dual-channel closedloop   supply chain", Journal of Cleaner Production,   191, 361{383 (2018).   25. Modarres, M. and Sha_ei, M. Optimality of network   marketing integrated in a dual-channel distribution   system", Scientia Iranica, 25(5), pp. 2838{2851   (2018).   26. Li, B., Zhu, M., Jiang, Y., and Li, Z. Pricing policies   of a competitive dual-channel green supply chain",   Journal of Cleaner Production, 112, pp. 2029{2042   (2016).   27. Nobil, A.H. and Taleizadeh, A.A. Analysing a fuzzy   integrated inventory-production-distribution planning   problem with maximum NPV of cash ows in a closedloop   supply chain", International Journal of Inventory   Research,3(1), pp. 31{48 (2016).   28. Liu, L., Parlar, M., and Zhu, X. Pricing and lead time   decisions in decentralized supply chains", Management   Science, 53, pp. 713{725 (2007).   29. Abbasi, B., Mirzazadeh, A., and Mohammadi, M.   Multi stage investment planning and customer selection   in a two echelon multi-period supply chain",   26(5), pp. 3032{3050 (2019).   30. Yao, D.Q. and Liu, J.J. Competitive pricing of mixed   retail and e-tail distribution channels", Omega, 33, pp.   235{247 (2005).   31. Yue, X. and Liu, J.J. Demand forecast sharing in   a dual-channel supply chain", European Journal of   Operational Research, 174(1), pp. 646{667 (2006).   32. Nobil, A.H., Jalali, S., and Niaki, S.T.A. Financially   embedded facility location decisions on designing a   supply chain structure: A case study", Systems Engineering,   21(6), pp. 520{533 (2018).