Dual-channel supply chain coordination considering targeted capacity allocation under uncertainty

Javad Asl-Najafi, Saeed Yaghoubi and Fatemeh Zand

Mathematics and Computers in Simulation (MATCOM), 2021, vol. 187, issue C, 566-585

Abstract: This paper investigates a dual-channel supply chain (SC) composed of a manufacturer and retailer in which the manufacturer confronts random yield issues. Since supply uncertainty may lead to a production shortage, the manufacturer faces the problem of allocating the products to traditional/online channels. To address this problem, a novel product-allocation policy is developed in which the limited supply is allocated to traditional and online channels under a flexible strategy called “targeted capacity allocation”. In order to coordinate the proposed decentralized channel, a two-part tariff contract is suggested. Furthermore, opening a direct channel besides brick-and-mortar stores is discussed through analytical results. Then, the effectiveness of the targeted capacity allocation policy is investigated by comparing the results of the current model with a case, in which, the same policy is not applied. By doing so, some interesting managerial insights on the merit of applying the capacity allocation policy in managing dual-channel SCs under yield uncertainty are revealed. Finally, numerical analysis shows that the proposed contract can perfectly coordinate the SC and achieve the Pareto improving solution for both partners.

Keywords: Dual-channel supply chain coordination; Yield uncertainty; Capacity allocation; Two-part tariff contract (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:matcom:v:187:y:2021:i:c:p:566-585

DOI: 10.1016/j.matcom.2021.03.019

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