Coordination through revenue sharing contract in an E‐commerce supply chain with consumer preference

Liu, Aijun; Li, Dengxue; Miao, Jie; Li, Zengxian

doi:10.1002/mde.3538

Cited by 6 publications

(5 citation statements)

References 44 publications

(55 reference statements)

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“…According to Cai (2010), dual-channel supply chains are affected by channel structures. Liu et al (2022) find that ecommerce service quality is the highest under the decentralized decision model and point out that improving the e-commerce service level is not necessarily beneficial for the e-tailer.…”

Section: Dual-channel Strategies In E-commercementioning

confidence: 89%

Impact of the introduction of marketplace channel on e‐tailer's logistics service strategy

et al. 2023

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We recently observe that some giant e-tailers (e.g., Amazon and JD.com) introduce marketplace channels by allowing third-party sellers to sell products through their platforms. Logistics service acts as a vital role in the operation of online platforms. In practice, the platform can outsource logistics service to third-party logistics providers (named as a third-party logistics strategy) or establish a self-run logistics network to distribute products (named as a self-run logistics strategy). This paper investigates the e-tailer's logistics service strategy in the presence of the marketplace channel's introduction. We reveal that the cost of logistics service plays a major role in determining the optimal logistics strategy. The self-run logistics strategy provides a low logistics service cost to the platform, which results in a higher consumer surplus in comparison with the third-party logistics strategy. Further, we find that when the logistics service cost is low, the platform prefers to establish self-run logistics in the presence of the marketplace channel. Finally, our results show that under the thirdparty logistics strategy, the platform benefits from the marketplace channel in the presence of an intermediate commission fee and a low discount factor. Based on game-theoretic models, some managerial insights are suggested for online retailers to choose the optimal logistics service strategy in the presence of introducing the marketplace channel.

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Section: Dual-channel Strategies In E-commercementioning

confidence: 89%

Impact of the introduction of marketplace channel on e‐tailer's logistics service strategy

et al. 2023

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“…The second related stream of literature is the coordination strategy for the FPSC. To eliminate the double marginal effect in the decentralized channel, coordination contracts are designed, such as the quantity discount contract (Plambeck & Taylor, 2005), the wholesale price contract (Xu & Bisi, 2012), the revenue‐sharing contract (Cachon & Lariviere, 2005; Liu et al, 2022; Liu & Liu, 2021; Xiao & Xu, 2013), and the cost‐sharing contract (Ghosh & Shah, 2015; He et al, 2020; Zhou et al, 2018). Based on these contracts, Cai et al (2010) consider the impact of product quality and freshness‐keeping effort and design an improved coordination contract for the FPSC.…”

Section: Literature Reviewmentioning

confidence: 99%

Value‐added service decision and coordination under fresh produce e‐commerce considering order cancelation

2023

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This paper proposes an analytic model under fresh produce e-commerce considering value-added service and order cancelation behavior. We first examine the optimal prices, value-added service decisions, and profits in the centralized and decentralized channels. Then, the revenue-cost-sharing contract is designed to eliminate the double marginal effect in the decentralized channel. The main findings are threefold.First, with the improvement of product quality, the optimal value-added service may increase and then decrease in both centralized and decentralized channels. Second, compared with the centralized channel, the decentralized channel prefers a lower retail price only when both salvage value coefficient and product quality are high.Besides, the proposed revenue-cost-sharing contract performs well in improving the value-added service and profits in the decentralized channel.

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“…The consumers' preference for self-run maintenance provided by the firm is denoted as the parameter α, which is also the proportion of consumers who choose the company's direct maintenance (Dan et al, 2018;Liu et al, 2022). The product failure rate is represented by the parameter r. The prices of the firm's and the third-party service provider's repair are p F and p T , respectively.…”

Section: The Demand Functionmentioning

confidence: 99%

“…To increase the core competitiveness of its services, the firm adopts the original part for both services while non‐original parts are used in the third‐party business. Based on the above analysis, the demand function of the firm and the third‐party service provider can be presented as follows:

D_{F}^{S} goodbreak= ((), 1 goodbreak- θ) ((), a goodbreak- p) italicαr goodbreak- p_{F} goodbreak+ δ p_{T} goodbreak+ η ((), s_{F} goodbreak- δ s_{T})

D_{T}^{S} goodbreak= ((), 1 goodbreak- θ) ((), a goodbreak- p) ((), 1 goodbreak- α) r goodbreak- p_{T} goodbreak+ δ p_{F} goodbreak+ η ((), s_{T} goodbreak- δ s_{F})

The consumers' preference for self‐run maintenance provided by the firm is denoted as the parameter

α

, which is also the proportion of consumers who choose the company's direct maintenance (Dan et al, 2018; Liu et al, 2022). The product failure rate is represented by the parameter

r

.…”

Section: Problem Description and Model Setupmentioning

confidence: 99%

Optimal maintenance service outsourcing strategy considering extended warranty service

Cao

Han

et al. 2022

Manage Decis Econ

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In recent years, extended warranty (EW) services are widely provided by brand firms.Given that third-party maintenance service providers have more maintenance cost advantages than brand firms, brand firms face the challenge of whether to enter the maintenance service market. To address the above challenge and issue, we develop theoretical models. The research shows that the cost coefficient of developing maintenance service plays a critical role in the optimal maintenance service operation strategy. And the base market sizes of the EW and the charged maintenance service have significant influences on the results. Moreover, we propose conditions for a win-win outcome. | INTRODUCTIONWith the increasing price competition of products, the profit space of firms has declined. To promote product competitiveness and help consumers to avoid risk, more and more firms have begun to provide extended warranty (EW) services that can bring considerable profits (Hsiao et al., 2010;Lam & Lam, 2001). Though the handsome profit brought by EWs, firms should bear the heavy cost of operating that bothers some firms. It is noteworthy that the warranty services cost of Tesla is $123 million in 2017 (Guajardo et al., 2016). In this context, though there are still many brand firms providing after-sales services by themselves, like Huawei, OPPO, and DJI (DJI, 2021;Huawei, 2021;OPPO, 2021), an increasing number of brand firms select a low investment and low responsibility way, that is, outsourcing.Outsourcing, as an efficient strategy, is widely used by majority brand firms and helps firms to avoid the heavy operating cost and to focus on their core competencies, such as Nike and Apple who outsource their production line. Besides production outsourcing, service outsourcing is particularly common nowadays, such as logistics service, pre-sale service, and after-sales service. Outsourcing aftersale services to the third-party service providers lowers the barrier of entering into the great potential EW market for some firms without enough resources and contributes to focusing on the core businesses for some giant firms by avoiding the huge costs of establishing and operating service networks and wasting limited resources (Kurvinen et al., 2016;Yoo et al., 2021). For instance, BMW outsources its warranty services to a third-party service provider (Esmaeili et al., 2014).And JD outsources the after-sales maintenance service of their brand "JD Manufacture" to a third-party service provider, Baixiubao (ITS, 2017). It also plays an important role in avoiding competition and improving the performance of the entire supply chain by allowing professionals to handle professional issues. On a whole, there is no doubt that the outsourcing after-sale services strategy is an efficient way to reduce the operating cost for firms. Besides, it is also a good way to improve service convenience.

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Coordination through revenue sharing contract in an E‐commerce supply chain with consumer preference

Cited by 6 publications

References 44 publications

Impact of the introduction of marketplace channel on e‐tailer's logistics service strategy

Impact of the introduction of marketplace channel on e‐tailer's logistics service strategy

Value‐added service decision and coordination under fresh produce e‐commerce considering order cancelation

Optimal maintenance service outsourcing strategy considering extended warranty service

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