Price and Lead Time Decisions in a Dual-Channel Supply Chain with Traditional and Online Sales Channels Considering Centralized and Decentralized Conditions and Transportation Modes

Document Type : Original Article

Authors

1 Associate Professor,Alzahra University.

2 Ph.D Student, Alzahra University.

Abstract

Today, with the rapid growth of Information Technology, manufacturers provide their products through online direct channels to the consumers as well as the traditional physical channels. In this study, a dual channel supply chain including one manufacturer and one retailer is considered. The manufacturer can sell his products in two ways: the traditional retail channel and online direct channel. It is assumed that the manufacturer offers his product on an online channel via two different transportation modes and correspondingly two different lead times. Initially, a decentralized supply chain is considered, and then it is assumed that the manufacturer is vertically integrated with the retailer in centralized supply chain. The first model is analyzed using the Stackelberg game approach with the manufacturer as the leader, and the second model is optimized using an integrated approach. Optimal decisions of prices and delivery lead times are determined. The major contribution of this paper is existence of two online channels with two different service levels. Our numerical studies reveals that the integration and coordination of the manufacturer and the retailer is beneficial for all members of the supply chain and significantly increase the profit of the whole supply chain.

Keywords

Main Subjects

References

  1. Boyaci, T., & Ray, S. (2003). Product differentiation and capacity cost interaction in time and price sensitive markets. Manufacturing & Service Operations Management, 5(1), 18-36.
  2. Chen, J., Zhang, H., & Sun, Y. (2012). Implementing coordination contracts in a manufacturer Stackelberg dual-channel supply chain. Omega, 40(5), 571-583.
  3. Chen, P., Li, B., Jiang, Y., & Hou, P. (2017). The Impact of Manufacturer’s Direct Sales and Cost Information Asymmetry in a Dual-Channel Supply Chain with a Risk-Averse Retailer. International Journal of Electronic Commerce, 21(1), 43-66.
  4. Heydari, J., Govindan, K., & Aslani, A. (2019). Pricing and greening decisions in a three-tier dual channel supply chain. International Journal of Production Economics, 217, 185-196.
  5. He, C., & Zhou, H. (2019). A retailer promotion policy model in a manufacturer Stackelberg dual-channel green supply chain. 11 th CIRP Conference on Industrial Product-Service Systems, Procedia CIRP, 83, 722-727.
  6. He, Y., Huang, H., & Li, D. (2020). Inventory and pricing decisions for a dual-channel supply chain with deteriorating products. Operational Research, 20, 1461-1503.
  7. Hua, G., Wang, S., & Cheng, T. E. (2010). Price and lead time decisions in dual-channel supply chains. European Journal of Operational Research, 205(1), 113-126.
  8. Huang, W., & Swaminathan, J. M. (2009). Introduction of a second channel: Implications for pricing and profits. European Journal of Operational Research, 194(1), 258-279.
  9. Jafari, H., Hejazi, S.R., & Rasti-Barzoki, M. (2016). Pricing Decisions in Dual-Channel Supply Chain Including Monopolistic Manufacturer and Duopolistic Retailers: A Game-Theoretic Approach. Journal of Industrial Competition Trade, 16, 323-343.
  10. Kai, J. (2016). Research on Cooperative Advertising Decisions in Dual-Channel Supply Chain Under Asymmetric Demand Information When Online Channel Implements Discount Promotion. Management Science and Engineering, 10(4), 13-19.
  11. Ke, H., Huang, H., & Gao, X. (2018). Pricing decision problem in dual-channel supply chain based on experts' belief degrees. Soft Computing, 22, 5683-5698.
  12. Lederer, P. J., & Li, L. (1997). Pricing, production, scheduling, and delivery-time competition. Operations Research, 45(3), 407-420.
  13. Li, G., Li, L., Sethi, S. P., & Guan, X. (2019). Return strategy and pricing in a dual-channel supply chain. International Journal of Production Economics, 215, 153-164.
  14. Liu, L., Parlar, M., & Zhu, S. X. (2007). Pricing and lead time decisions in decentralized supply chains. Management science, 53(5), 713-725.
  15. Liu, Y., Li, J., Ren, W., & Forrest, J.Y-L. (2020). Differentiated products pricing with consumer network acceptance in a dual-channel supply chain. Electronic Commerce Research and Applications, 39, 100915.
  16. Matsui, K. (2020). Optimal bargaining timing of a wholesale price for a manufacturer with a retailer in a dual-channel supply chain. European Journal of Operational Research, 287, 225-236.
  17. Modak, N. M., & Kelle, P. (2019). Managing a dual-channel supply chain under price and delivery-time dependent stochastic demand. European Journal of Operational Research, 272(1), 147-161.
  18. Mukhopadhyay, S. K., Yao, D.-Q., & Yue, X. (2008). Information sharing of value-adding retailer in a mixed channel hi-tech supply chain. Journal of Business Research, 61(9), 950-958.
  19. Nazari, L., Seifbarghy, M., & Setak, M. (2018). Modeling and analyzing pricing and inventory problem in a closed-loop supply chain with return policy and multiple manufacturers and multiple sales channels using game theory. Scientia Iranica, 25(5), 2759-2774.
  20. Rahmani, D., Qaisari Hasan Abadi, M., & Hosseininezhad, S.J. (2020). Joint decision on product greenness strategies and pricing in a dual-channel supply chain: A robust possibilistic approach. Journal of Cleaner Production, 256, 120437.
  21. Ranjan, A., & Jha, J. (2019). Pricing and coordination strategies of a dual-channel supply chain considering green quality and sales effort. Journal of Cleaner Production, 218, 409-424.
  22. Raoufinia, M., Baradaran, V., & Shahrjerdi, R. (2018). A dynamid game theory model for analyzing competition in the oligopoly markets. Journal of Industrial Management Perspective,8(3), 63-94 (In Persian).
  23. Raza, S.A., &Madhumohan Govindaluri, S. (2019). Pricing strategies in a dual-channel green supply chain with cannibalization and risk aversion. Operations Research Perspectives, 6, 100118.
  24. Setak, M., Kafshian Ahar, H., & Alaei, S. (2017). Coordination of Information Sharing and Cooperative Advertising in a Decentralized Supply Chain with Competing Retailers Considering Free Riding Behavior. Journal of Industrial and Systems Engineering, 10(2), 0-0.
  25. Shi, S., Sun, J., & Cheng, T. (2020). Wholesale or drop-shipping: Contract choices of the online retailer and the manufacturer in a dual-channel supply chain. International Journal of Production Economics, 107618.
  26. Soleimani, F. (2016). Optimal pricing decisions in a fuzzy dual-channel supply chain. Soft Computing, 20, 689-696.
  27. Spengler, J. (1950). Vertical restraints and antitrust policy. J. Political Economics, 58, 347-352.
  28. Taleizadeh, A., & Mohammadi, R. (2015). Optimizing the selling price and advertising cost in a two layers supply chain including a manufacturer and two retailers. Journal of Industrial Management Perspective,5(2), 107-127 (In Persian).
  29. Vaghefzadeh, M.H., Karimi, B. (2018). Demand management using autoregressive time series modeling in mobile value-added services. Journal of Industrial Management Perspective,8(2), 9-30 (In Persian).
  30. Wang, J., Jian, H., & Yu, M. (2020). Pricing decisions in a dual-channel green supply chain with product customization. Journal of Cleaner Production. 247, 119101.
  31. Xu, H.,Zhen Liu, Z., & Zhang, S.H. (2012). A strategic analysis of dual-channel supply chain design with price and delivery lead time considerations. International Journal of Production Economics, 139, 654-663.
  32. Xu, Q., Liu, Z., & He, J. (2015). Optimum Retail Pricing Based on Price Comparison in Dual-Channel Supply Chain. In: Zhang R., Zhang Z., Liu K., Zhang J. (eds) LISS 2013. Springer, Berlin, Heidelberg.
  33. Yan, R., & Pei, Z. (2009). Retail services and firm profit in a dual-channel market. Journal of Retailing and Consumer Services, 16(4), 306-314.
  34. Yang, B., & Geunes, J. (2007). Inventory and lead time planning with lead-time-sensitive demand. IIE Transactions, 39(5), 439-452.
  35. Zhang, C., Liu, Y., & Han, G. (2021). Two-stage pricing strategies of a dual-channel supply chain considering public green preference. Computers & Industrial Engineering, 151, 106988.
  36. Zhang, Y., & Hezarkhani, B. (2021).Competition in dual-channel supply chains: The manufacturers’ channel selection. European Journal of Operational Research, 91(1), 244-262.
  37. Zhou, J., Zhao, R., & Wang, W. (2019). Pricing decision of a manufacturer in a dual-channel supply chain with asymmetric information. European Journal of Operational Research, 278(3), 809-820.

 

Files

Share

How to cite

Statistics