Price competition and coordination of dual-channel supply chains

Chunhua Tang and Taosheng Wang

International Journal of Networking and Virtual Organisations, 2013, vol. 13, issue 4, 297-310

Abstract: The dual-channel is a more prevalent channel structure in current marketing systems, it including the traditional retail channel and the direct channel through web-based sales. And price competition and channel conflict are inevitable between retail channel and the manufacturer's direct sale channel. This paper develops pricing decisions and coordination models in a one-manufacturer-one retailer dual-channel supply chain. We fully characterise partners' optimal decisions by adopting a customer's utility function. We discuss the optimal decisions in decentralised dual-channel supply chain including market-like setting without revenue sharing contract and contract-like setting, and obtain the optimal prices and quantity decisions in centralised and decentralised dual-channel supply chain. Moreover, we propose the feasible revenue-sharing contracts to coordinate the dual-channel supply chain, and obtain the optimal parameters of the revenue sharing contract. It is always beneficial for both the partners and system to adopt a revenue sharing contract. Finally, the proposed models are further analysed through numerical examples.

Keywords: supply chain coordination; dual-channel supply chains; revenue sharing; contracts; price competition; game theory; decentralisation; marketing systems; supply chain management; SCM; pricing decisions. (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijnvor:v:13:y:2013:i:4:p:297-310

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