Management Science and Engineering
Coordinating Dual-Channel Supply Chain Under Price Mechanism With Production Cost Disruption
Abstract
This paper studies a two-stage dual-channel supply chain consisting of one manufacturer and one traditional retailer. The manufacturer has its own online channel when he sells the product to the offline retailer. There exists a Stackelberg game between the manufacturer and the offline retailer, in which the manufacturer is the leader and the retailer is the follower. The manufacturer abandons the pricing right in the online channel and adopts the marketing strategy which the online retail price is equal to the offline one. When the supply chain is in a static (undisrupted) condition, it can obtain Pareto improvement and eventually be coordinated by a two-part-tariff contract with a one-time transfer payment. When disruptions make the manufacturer’s unit production cost change, we can obtain the retail price, the production quantity and the total supply chain profit under different disruption levels in the centralized supply chain. Then, we find that there are some certain robustness both in the manufacturer’s production quantity and in the offline retail price. When the supply chain is decentralized, we can coordinate the supply chain by changing the wholesale price according to different disruption levels. Finally, some numerical examples are presented to illustrate the results.
Keywords
Full Text:
PDFReferences
Cachon, G. P. (2003). Supply chains coordination with contracts. Handbooks in Operations Research and Management Science, 11, 227-339.
Cai, G. (2010). Channel selection and coordination in dual-channel supply chains. Journal of Retailing, 86(1), 22-36.
Cao, E., Ma, Y., Wan, C., & Lai, M. (2013). Contracting with asymmetric cost information in a dual-channel supply chain. Operations Research Letters, 41(4), 410-414.
Chen, J., Zhang, H., & Sun, Y. (2012). Implementing coordination contracts in a manufacturer Stackelberg dual-channel supply chain. Omega, 40(5), 571-583.
Chen, K. Y., Kaya, M., & Özer, Ö. (2008). Dual sales channel management with service competition. Manufacturing & Service Operations Management, 10(4), 654-675.
Chiang, W. K., Chhajed, D., & Hess, J. D. (2003). Direct marketing, indirect profits: A strategic analysis of dual channel supply-chain design. Management Science, 49(1), 1-20.
Choi, S. C. (1996). Price competition in a duopoly common retailer channel. Journal of Retailing, 72(2), 117-134.
Hua, G., Wang, S., & Cheng, T. C. E. (2010). Price and lead time decisions in dual-channel supply chains. European Journal of Operational Research, 205(1), 113-126.
Huang, C., Yu, G., Wang, S., & Wang, X. (2006). Disruption management for supply chain coordination with exponential demand function. Acta Mathematica Scientia, 26(4), 655-669.
Huang, S. (2013) Pricing and production decisions in a dual-channel supply chain when production costs are disrupted. Economic Modelling (30), 521-538
Huang, S., Yang, C, & Zhang, X, (2012). Pricing and production decisions in dual-channel supply chains with demand disruptions. Computers & Industrial Engineering, (62), 70-83.
Lei, D., Li, J., & Liu, Z. (2012). Supply chains contracts under demand and cost disruptions with asymmetric information. International Journal of Production Economics, 139(1), 116-126.
Ma, W., Zhao, Z., & Ke, H. (2013). Dual-channel closed-loop supply chains with government consumption-subsidy. European Journal of Operational Research, 226, 221-
227
Qi, X., Bard, J. F., & Yu, G. (2004). Supply chains coordination with demand disruptions. Omega, 32(4), 301-312.
Ryan, J. K., Sun, D., & Zhao, X. (2013). Coordinating a supply chain with a manufacturer-owned online channel: A dual channel model under price competition. IEEE Transactions on Engineering Management, 60(2), 247-
259
Tsay, A., & Agrawal, N. (2004). Channel conflict and coordination in the e-commerce age. Production and Operations Management, 13(1), 93-110.
Xiao, T., & Qi, X. (2008). Price competition, cost and demand disruptions and coordination of a supply chain with one manufacturer and two competing retailers. Omega, 36(5), 741-753.
Xiao, T., & Yu, G. (2006). Supply chain disruption management and evolutionarily stable strategies of retailers in the quantity-setting duopoly situation with homogeneous goods. European Journal of Operational Research, 173(2), 648-668.
Xiao, T., Qi, X., & Yu, G. (2007). Coordination of supply chain after demand disruptions when retailers compete. International Journal of Production Economics, 109(1-2), 162-179.
Xiao, T., Yu, G., Sheng, Z., & Xia, Y. (2005). Coordination of a supply chain with one manufacturer and two-retailers under demand promotion and disruption management decisions. Annals of Operations Research, 135(1), 87-109.
Yang, J., Qi, X., & Yu, G. (2005). Disruption management in production planning. Naval Research Logistics, 52(5), 420-442.
DOI: http://dx.doi.org/10.3968/6591
Refbacks
- There are currently no refbacks.
Copyright (c)
Share us to: 
Reminder
We are currently accepting submissions via email only.
The registration and online submission functions have been disabled.
Please send your manuscripts to mse@cscanada.net，or mse@cscanada.org for consideration.
We look forward to receiving your work.
We only use three mailboxes as follows to deal with issues about paper acceptance, payment and submission of electronic versions of our journals to databases:
caooc@hotmail.com; mse@cscanada.net; mse@cscanada.org
Articles published in Management Science and Engineering are licensed under Creative Commons Attribution 4.0 (CC-BY).
MANAGEMENT SCIENCE AND ENGINEERING Editorial Office
Address:1055 Rue Lucien-L'Allier, Unit #772, Montreal, QC H3G 3C4, Canada.
Telephone: 1-514-558 6138
Http://www.cscanada.net Http://www.cscanada.org
Copyright © 2010 Canadian Research & Development Centre of Sciences and Cultures 
