Unidirectional transshipment policies in a dual-channel supply chain

Yong He, Peng Zhang and Yuliang Yao

Economic Modelling, 2014, vol. 40, issue C, 259-268

Abstract: The main purpose of this paper is to study the ordering, transshipment price, wholesale price and contracting decisions of a dual-channel supply chain with unidirectional transshipment. We establish a dual-channel model which consists of a manufacturer, an online shop owned by a manufacturer and a retailer. We first examine the ordering decisions and establish the existence of the pure strategy Nash equilibrium. Then we study other decisions under two types of transshipment price setting: exogenous and endogenous. Under exogenous transshipment price, we investigate the wholesale price decisions of the manufacturer. And then we find that the transshipment strategy with wholesale price contract can coordinate the supply chain only under a certain condition and cannot accommodate arbitrary divisions of the profit. So we further develop an all-unit quantity discount contract to coordinate the supply chain and achieve win–win outcome. Under endogenous transshipment price, we use Generalized Nash Bargaining Solution to study the transshipment price decisions and obtain a transshipment price mechanism. We find that the transshipment price mechanism always coordinates the supply chain.

Keywords: Dual-channel supply chain; Unidirectional transshipment; Supply chain coordination (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:40:y:2014:i:c:p:259-268

DOI: 10.1016/j.econmod.2014.04.016

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