Managing Online Channel and Optimization in Supply Chain Systems with Different Channel Leaderships
Journal
IEEE Transactions on Systems, Man, and Cybernetics: Systems
Journal Volume
51
Journal Issue
11
Pages
7177-7190
Date Issued
2021
Author(s)
Abstract
In supply chain systems, with the rapid growth of electronic commerce, a lot of firms are puzzled with the issue about how to best manage the distribution channels. In this article, we study the online channel management, pricing and coordination (i.e., optimization) in supply chains in which both channel members have an opportunity to introduce an online channel for retailing products to consumers. We focus on examining the roles of 'channel leadership,' online channel decision and customer channel preference. Through systematic analysis and comparisons, we obtain some important insights, such as: 1) consumers do not care about who the channel leader is, but care about who establishes the online channel; 2) the dual-channel structure can make the manufacturer charge a 'higher wholesale price' regardless of who establishes the online channel and who the channel leader is; and 3) no matter who the channel leader is, the dual-channel structure hurts the consumers' benefit when the retailer establishes the online channel. We also illustrate how the proposed dual-channel supply chain can be optimized with the use of supply chain contracts. ? 2021 IEEE.
Subjects
Channel leadership; dual channels; pricing competition; supply chain coordination
Other Subjects
Inventory control; Online systems; Supply chain management; Supply chains; Channel leadership; Distribution channel; Dual channel; Dual-channel structures; Online channels; Online optimization; Pricing competition; Rapid growth; Supply chain coordination; Supply chain systems; Costs
Publisher
Institute of Electrical and Electronics Engineers Inc.
Type
journal article