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Capacity Allocation and Compensation in a Dual-Channel Supply Chain under Uncertain Environment
Joint Authors
Tsai, Sang-Bing
Wang, Jiangtao
Su, Jiafu
Yang, Jiaquan
Zhang, Xumei
Huang, Yating
Chang, Li-Chung
Source
Mathematical Problems in Engineering
Issue
Vol. 2019, Issue 2019 (31 Dec. 2019), pp.1-12, 12 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2019-08-26
Country of Publication
Egypt
No. of Pages
12
Main Subjects
Abstract EN
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.
American Psychological Association (APA)
Yang, Jiaquan& Zhang, Xumei& Huang, Yating& Su, Jiafu& Tsai, Sang-Bing& Chang, Li-Chung…[et al.]. 2019. Capacity Allocation and Compensation in a Dual-Channel Supply Chain under Uncertain Environment. Mathematical Problems in Engineering،Vol. 2019, no. 2019, pp.1-12.
https://search.emarefa.net/detail/BIM-1195058
Modern Language Association (MLA)
Yang, Jiaquan…[et al.]. Capacity Allocation and Compensation in a Dual-Channel Supply Chain under Uncertain Environment. Mathematical Problems in Engineering No. 2019 (2019), pp.1-12.
https://search.emarefa.net/detail/BIM-1195058
American Medical Association (AMA)
Yang, Jiaquan& Zhang, Xumei& Huang, Yating& Su, Jiafu& Tsai, Sang-Bing& Chang, Li-Chung…[et al.]. Capacity Allocation and Compensation in a Dual-Channel Supply Chain under Uncertain Environment. Mathematical Problems in Engineering. 2019. Vol. 2019, no. 2019, pp.1-12.
https://search.emarefa.net/detail/BIM-1195058
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1195058