Decision-Making of an Integrated Supply Chain with Hybrid Sales Channels to Cope with Dual Cost Disruptions

Wang Yuyan () and Zhang Yuanyuan
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Wang Yuyan: School of Management Science and Engineering, Shandong University of Finance and Economics, 250014, Jinan, China
Zhang Yuanyuan: School of Management Science and Engineering, Shandong University of Finance and Economics, 250014, Jinan, China

Journal of Systems Science and Information, 2016, vol. 4, issue 1, 1-23

Abstract: For an integrated supply chain with an online direct channel and a traditional retail channel competing with each other, solutions are be identified as to the two channels’ ordering policies, product pricing strategies, and optimal product output, when product costs in the two channels are disrupted in different ways. Findings are as follows: 1) For the integrated supply chain, when unanticipated events lead to product cost increase, market size will shrink, and the system profit is harmed. In contrast, when unanticipated events lead to reduced product cost, market size will expand, and system profit increases; 2) Production strategies applicable to normal situations have certain robustness, and should be maintained when product cost disruption caused by unanticipated events is relatively small; 3) When product cost disruption caused by unanticipated events is relatively large, product sales price should be first adjusted, and aligned with the way that product cost is disrupted. Meanwhile, order quantity and product output should also be properly adjusted. That is, order quantity and output need to be reduced when product cost increases; order quantity and output need to be increased when product cost is reduced. In the end, this paper employs numerical examples to testify the findings. Research conclusions help to further enrich and extend the theoretic basis of “supply chain disruption management”, and are helpful for researchers’ further study.

Keywords: integrated supply chain; hybrid sales channel; disruption (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:jossai:v:4:y:2016:i:1:p:1-23:n:1

DOI: 10.1515/JSSI-2016-0001

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