Optimal decisions in a dual-channel supply chain under simultaneous demand and production cost disruptions

Fariba Soleimani (), Alireza Arshadi Khamseh () and Bahman Naderi ()
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Fariba Soleimani: University of Kharazmi
Alireza Arshadi Khamseh: University of Kharazmi
Bahman Naderi: University of Kharazmi

Annals of Operations Research, 2016, vol. 243, issue 1, No 18, 321 pages

Abstract: Abstract This paper studies the pricing strategies in centralized and decentralized dual-channel supply chains. It first discusses that production cost and demand disruptions are highly correlated, and they influence the pricing and production decisions. Therefore, both disruptions should be considered simultaneously. A game-theoretical method is proposed to drive optimal wholesale and retail price for manufacture and retailer under these disruptions. Then, it is shown that the optimal prices are affected by sharing demand for the direct channel in both centralized and decentralized problems. Moreover, this paper models the dual-channel supply chains with production cost and demand disruptions in two structures, disruptions increasing/decreasing the demand. The models are then solved using the KKT conditions. Finally, a numerical example is presented to show total profit of supply chain for each structure.

Keywords: Supply chain; Dual-channel; Cost and demand disruption; Optimization; Game theory (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (12)

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DOI: 10.1007/s10479-014-1675-6

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