scholarly journals Inventory and Ordering Decisions in Dual-Channel Supply Chains Involving Free Riding and Consumer Switching Behavior with Supply Chain Financing

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-23
Author(s):  
Senyu Xu ◽  
Huajun Tang ◽  
Zhijun Lin
Keyword(s):  
Supply Chain ◽  
Free Riding ◽  
Expected Profit ◽  
Switching Behavior ◽  
Inventory Level ◽  
Order Quantity ◽  
Effort Level ◽  
Dual Channel ◽  
Consumer Switching ◽  
Dual Channel Supply Chain

This study introduces a dual-channel supply chain including a supplier and a retailer with capital constraints, in which the retailer can apply for the trade credit financing from the supplier. This work investigates the effects of two typical behaviors, free riding behavior and consumer switching behavior, on inventory, ordering, and sales effort decisions in decentralized and centralized decision situations with stochastic demand. In order to achieve the optimal performance in the centralized system, this research designs a partial buyback contract to coordinate the supply chain. Furthermore, numerical analysis is provided to test the feasibility of the model. The results indicate that in the dual-channel supply chain with the above two behaviors, (1) the optimal sales effort level, optimal order quantity, the optimal offline, and online profits under the centralized decision-making are more than those under decentralized scenario, except for the optimal inventory level; (2) the increase of the offline consumer switching rate will lead to the reduction of the offline order quantity and the offline expected profit and raise the online inventory level and the online expected profit; (3) the increase of the online consumer switching rate will raise the offline order quantity and the offline expected profit but has no significant impact on the online inventory level and the online expected profit; (4) the increase of the free riding coefficient of the supplier, no matter whether in decentralized or centralized systems, will reduce the offline sales effort level, the offline expected profit, and the online expected profit and raise the inventory level. Finally, this work provides some managerial implication.

scholarly journals Capacity Allocation and Compensation in a Dual-Channel Supply Chain under Uncertain Environment

2019 ◽  
Vol 2019 ◽  
pp. 1-12
Author(s):  
Jiaquan Yang ◽  
Xumei Zhang ◽  
Yating Huang ◽  
Jiafu Su ◽  
Sang-Bing Tsai ◽  
...  
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Expected Profit ◽  
Decision Making Process ◽  
Direct Selling ◽  
Channel Conflict ◽  
Dual Channel ◽  
Decentralized Decision Making ◽  
Capacity Uncertainty ◽  
Dual Channel Supply Chain

The dual-channel supply chain is widely adopted by main manufacturers, potentially incurring channel conflicts between the traditional retail channel which is owned by the independent retailer and the online channel which is directly managed by the manufacturer. The purpose of this paper is to deal with the scenario where channel conflicts may arise under production capacity uncertainty, when the manufacturer tends to privilege the direct selling channel over the retail selling channel. To achieve the goal, this paper establishes a Stackelberg game model consisting of a manufacturer and a retailer, studies the scenario where the manufacturer satisfies the direct selling channel first in the presence of capacity uncertainty, employs the decision optimization and the backward induction method to find the optimal inventory decision in the direct selling channel and the optimal order quantity decision making in the retail selling channel, and designs a compensation mechanism aiming to coordinate the channel conflict in the decentralized decision-making process. Results show that the optimal decisions aiming to maximize the expected profit of each supply chain member are not able to maximize the expected profit of entire dual-channel supply chain. However, when the manufacturer compensates the retailer’s profit loss based on the unsatisfied order and, in the meantime, adjusts the wholesale price to prevent the retailer which obtains the compensation from increasing order significantly, the compensation mechanism can coordinate the decision of each supply chain member, mitigate the channel conflict, maximize the expected profit of entire dual-channel supply chain, and achieve the Pareto improvement of supply chain members’ expected profit in the decentralized decision-making process.

scholarly journals FOOD SUPPLY CHAIN PLAYERS: WITH DIRECT AND TRADITIONAL CHANNELS

2017 ◽  
Vol 5 (6) ◽  
pp. 189-195
Author(s):  
N. Arunfred ◽  
D. Kinslin
Keyword(s):  
Supply Chain ◽  
Agricultural Products ◽  
Direct Channel ◽  
Order Quantity ◽  
Dual Channel ◽  
Dual Channels ◽  
The Difference ◽  
Optimum Solution ◽  
Dual Channel Supply Chain ◽  
Overall Effectiveness

We study a dual channel supply chain in perishable agricultural products. In which one channel is producer (farmer) sells the produce directly to the customer and the other channel is about transfer of produce to different channel players and reach the final customer. Consumers choose the purchase channel based on price, availability, accessibility, product quality, trust-ability and service qualities. The producer decides the price of the direct channel and the intermediaries decides both price and order quantity in the traditional method. We show that the difference in problem faced by the producers’ of the two channels plays an important role in determining the existence of dual channels in equilibrium. For the study Erode and Kanyakumari districts were chosen purposively. A sample of 80 farmers was selected randomly who are involved in both of the channels. In the case that the producer and the retailer coordination and to follow a centralized decision approach, we find that a direct channel will be an optimum solution for improving the overall effectiveness. Our results show that an increase in retailer’s service quality may increase the producer’s profit in dual channel and a larger range of consumer service sensitivity may benefit both parties in the dual channel. The results suggest that both the channel have problem and the optimum solution lies in between two channels.

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