Pareto Improvement Strategy for Service-Based Free-Riding in a Dual-Channel Supply Chain

Bin, Dan; Liu, Can; Xu, Guangye; Zhang, Xumei

doi:10.1142/s021759591450050x

Cited by 39 publications

(21 citation statements)

References 52 publications

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“…Thus, some scholars use internal contract proposed in a traditional supply chain to coordinate conflict in a DCSC. For instance, some scholars use cooperative advertising [16,30], inventory cooperation [31], and service cooperation [13] to coordinate the DCSC.…”

Section: Coordination Contract Design In a Dcscmentioning

confidence: 99%

“…Coordination contract is efficient to mitigate or eliminate the conflicts among supply chain members. There has extensive literature that studies coordination contract design in a dual channel supply chain (DCSC for short) [11][12][13][14][15][16][17]. However, these researches mainly design coordination contract where all supply chain members aim at maximizing profit.…”

Section: Introductionmentioning

confidence: 99%

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Pricing and coordination in a dual-channel supply chain with a socially responsible manufacturer

Shiyang

Zhou

2020

PLoS ONE

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This paper aims at designing coordination contract in a dual channel supply chain (DCSC) which consists of a socially responsible manufacturer and a retailer. We build stylized game models under both centralized and decentralized scenarios. Then, we identify the reason for supply chain inefficiency under decentralized scenario. Further, according to the manufacturer's corporate social responsibility (CSR) coefficient, we design two different contracts to achieve coordination. We find that with the impact of CSR, social welfare under centralized scenario is always higher than that under decentralized scenario. However, profit of the whole supply chain between the two scenarios has different relationship. More specifically, when CSR coefficient is relatively low, profit under centralized scenario is higher than that under decentralized scenario. When CSR coefficient is high, profit under centralized scenario is lower than that under decentralized scenario. Due to these two cases, we respectively design revenue sharing contract with franchise fee and wholesale price contract with franchise fee and government subsidy to achieve coordination. The result suggests that encouraging the manufacturer to bear CSR properly can reach a multi-win for social welfare, consumers and supply chain members through coordination contract. However, when CSR coefficient is higher than a certain threshold, conflict between supply chain members becomes irreconcilable which results in the retailer's resistance. In this condition, only through subsidy from government or philanthropic organization can supply chain members sustain their cooperation.

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Section: Coordination Contract Design In a Dcscmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Pricing and coordination in a dual-channel supply chain with a socially responsible manufacturer

Shiyang

Zhou

2020

PLoS ONE

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“…This phenomenon reduces selling and profit at retail stores. Hence sometimes retailers refuse to keep such products at their stores or refuse to become a part of free-riding selling pattern (Dan et al, 2014;Zhou et al, 2018). As the free-riding convenience to the customer reduces the overall demand also get shirked, to overcome this barrier, manufacturer and echannel members share a specific amount of profit with retailer to make the product available at the retail store for the free-riding.…”

Section: Free-ridingmentioning

confidence: 99%

“…As the free-riding convenience to the customer reduces the overall demand also get shirked, to overcome this barrier, manufacturer and echannel members share a specific amount of profit with retailer to make the product available at the retail store for the free-riding. Dan et al (2014) examined the impacts of bi-directional free-riding to develop a decision making model for selecting most favourable service levels under different dual supply chains scenario. He et al (2016) analysed an impact of consumer free-riding on carbon emissions and governmental e-commerce tax for a dual-channel closed loop supply chain.…”

Section: Free-ridingmentioning

confidence: 99%

Price and profit decisions in manufacturer-led dual-channel supply chain configurations

Pathak¹,

Kant²,

Shankar³

2020

10.5267/j.ijiec

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In the world of digitization, e-commerce practices has become more popular and attracts manufacturers to combine their traditional retail channel with an e-channel. To add some salient features in the existing study, this study develops an optimal pricing and profit decision model for manufacturer-led dual-channel supply chain configurations; namely Vertically Integrated Dual-Supply Chain (VID-SC), Decentralized Dual-channel Supply Chain (DD-SC), Partially Integrate Dual-Supply Chain (PID-SC) and Horizontally Integrated Dual-Supply Chain (HID-SC). The aim of this study is to examine the effect of selected decision parameters namely cooperative advertisement, delivery lead time and free-riding on price and profit of manufacturer-led dual supply chain configurations. A linear programming for profit maximization is developed and backward induction method is used to find the optimum values of price and profit. A numerical analysis is performed to evaluate the effect of selected decision parameters on price and profit. To check the robustness of the outcomes an interaction plot is made to indicate the relationship between the selected decision parameters on optimum price. The best fit values of these decision parameters lead to the optimum price and the profit. The study helps to find the best fit value of the selected decision parameters for their specified dualchannel configuration. As a result, the model contributes as a guideline moreover it is proficient to guide manufacturers and channel members as a decision making practices without actual implementation of any strategy or policy.

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“…This paper is related to the literature on the retailer's service effort in a dualchannel supply chain. The service effort strategies, including counseling service, product advertising, and exhibition halls, indeed effect consumers' shopping decisions [28,30,29,11,8,2,17,32]. The existing literature show that encroachment can bring channel competition, which motivates the retailer to improve the service level to beat back encroachment.…”

mentioning

confidence: 99%

Selection and impact of decision mode of encroachment and retail service in a dual-channel supply chain

Cao¹,

Min²

2022

JIMO

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<p style='text-indent:20px;'>Consider a supply chain consisting of one manufacturer and one retailer. The manufacturer may open direct channels through ex-ante or ex-post encroachment, and the retailer can provide consumers with ex-ante or ex-post service. We investigates the effects of encroachment and services on the optimal strategy for two members in three decision modes: MR mode (ex-ante encroachment), MRM mode (ex-post encroachment and ex-post service), and MRMR mode (ex-post encroachment and ex-ante service). The results show that in the MRM mode, both the wholesale and retail prices may become higher with encroachment. Improving the service efficiency may hurt the retailer, and increasing the operating cost for direct channels harms the retailer, while benefits the manufacturer. In addition, only in the MRM mode, the retailer maybe benefits from encroachment under certain conditions. We further study the equilibrium mode and the result shows as follows. The MR mode, widely adopted by the literature on manufacturer encroachment, always is worst for the manufacturer. Only when both the operating cost for direct channels and the service efficiency are low, the equilibrium decision mode is the MRMR mode, otherwise the MRM mode is the equilibrium decision mode.</p>

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Pareto Improvement Strategy for Service-Based Free-Riding in a Dual-Channel Supply Chain

Cited by 39 publications

References 52 publications

Pricing and coordination in a dual-channel supply chain with a socially responsible manufacturer

Pricing and coordination in a dual-channel supply chain with a socially responsible manufacturer

Price and profit decisions in manufacturer-led dual-channel supply chain configurations

Selection and impact of decision mode of encroachment and retail service in a dual-channel supply chain

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