Journal
COMPUTERS & INDUSTRIAL ENGINEERING
Volume 160, Issue -, Pages -Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.cie.2021.107546
Keywords
Dual-channel supply chain; Order fulfillment; Joint pricing and ordering; Distribution-free approach; Demand uncertainty
Funding
- National Natural Science Foundation of China [71772035]
- Talent Program of Liaoning province [XLYC1907104]
- Fundamental Research Funds for the Central Universities [N180614003]
Ask authors/readers for more resources
This research discusses the dual-channel supply chain model involving manufacturers, retailers, and e-tailers in a game theory context, focusing on the choices of pricing and order fulfillment policies. It evaluates optimal strategies under various market conditions through optimization models and distribution methods.
A dual-channel supply chain is considered in which a manufacturer sells its product through a traditional retailer and an e-tailer, wherein the e-tailer may adopt two, i.e., the conventional batch ordering and the drop-shipping, order fulfillment policies. The problem is modeled as Stackelberg games in which the manufacturer is the leader and the retailer and the e-tailer are the followers competing on price. Optimization models are developed and equilibrium solutions are obtained for unknown distributions of the uncertain demands through a distribution-free approach. Analytical solutions of pricing and ordering decisions are also derived when the uncertain demand is assumed to follow known distributions to evaluate the performance of the distribution-free approach. Numerical studies are conducted to evaluate the effectiveness of the distribution-free approach and sensitivity analyses are performed to examine the effects of several important parameters on the equilibrium solutions. The choice of the e-tailer and the preference of the manufacturer for the order fulfillment policies are also analyzed through numerical studies when important parameters change. The results show that the e-tailer prefers the batch ordering policy if its market share is relatively large and its profit-sharing ratio is relatively low, the manufacturer prefers the batch ordering policy if the e-tailer's market share is relatively small and the e-tailer's profit-sharing ratio is relatively high, and both the e-tailer and the manufacturer prefer the drop-shipping policy for other situations. The drop-shipping policy benefits the manufacturer and the e-tailer when the channel substitutability is relatively low and the demand fluctuations are relatively high.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available