Coordination of a Dual-Channel Pharmaceutical Supply Chain Based on the Susceptible-Infected-Susceptible Epidemic Model

Yanhong Hou, Fan Wang, Zhitong Chen and Victor Shi
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Yanhong Hou: School of International Pharmaceutical Business, China Pharmaceutical University, Nanjing 211198, China
Fan Wang: Human Resources Department, Guizhou University, Guiyang 550025, China
Zhitong Chen: School of Physical Education and Health, Shanghai Lixin University of Accounting and Finance, Shanghai 201209, China
Victor Shi: Lazaridis School of Business and Economics, Wilfrid Laurier University, Waterloo, ON N2L 3C5, Canada

IJERPH, 2020, vol. 17, issue 9, 1-16

Abstract: With the continuous development of Internet, online pharmaceutical channels in many countries have seen rapid expansion. As a result, pharmaceutical supply chain participants can adopt dual channels, namely, both online channels and offline channels. As online channels compete with traditional offline channels, it is of great relevance to study the potential conflicts and coordination between them, which is the focus of this paper. Specifically, this article develops a susceptible-infected-susceptible epidemic model of the dual channels for a pharmaceutical supply chain. Our main findings are that in a competitive situation, there is a positive stable equilibrium. Furthermore, increasing the rate of influence of offline transmission, online transmission, and cross transmission will improve sales. Moreover, improving the transmission influence rate will turn more potential customers into purchasers, increase channel sales, and achieve dual channel coordination. We then conduct numerical analysis to illustrate and complement the findings from the model. Finally, we provide managerial insights for implementing successful dual-channel pharmaceutical supply chains.

Keywords: susceptible-infected-susceptible epidemic model; pharmaceutical supply chain; dual channels; supply chain coordination (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
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