Implementing coordination contracts in a manufacturer Stackelberg dual-channel supply chain

Jing Chen, Hui Zhang and Ying Sun

Omega, 2012, vol. 40, issue 5, pages 571-583

Abstract: We examine a manufacturer's pricing strategies in a dual-channel supply chain, in which the manufacturer is a Stackelberg leader and the retailer is a follower. We show the conditions under which the manufacturer and the retailer both prefer a dual-channel supply chain. We examine the coordination schemes for a dual-channel supply chain and find that a manufacturer's contract with a wholesale price and a price for the direct channel can coordinate the dual-channel supply channel, benefiting the retailer but not the manufacturer. We illustrate how such a contract with a complementary agreement, such as a two-part tariff or a profit-sharing agreement, can coordinate the dual-channel supply chain and enable both the manufacturer and the retailer to be a win–win.

Keywords: Dual-channel; Stackelberg game; Supply chain coordination; Channel competition; Supply chain contract (search for similar items in EconPapers)
Date: 2012
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