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Implementing coordination contracts in a manufacturer Stackelberg dual-channel supply chain

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  • Chen, Jing
  • Zhang, Hui
  • Sun, Ying
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    Abstract

    We examine a manufacturer's pricing strategies in a dual-channel supply chain, in which the manufacturer is a Stackelberg leader and the retailer is a follower. We show the conditions under which the manufacturer and the retailer both prefer a dual-channel supply chain. We examine the coordination schemes for a dual-channel supply chain and find that a manufacturer's contract with a wholesale price and a price for the direct channel can coordinate the dual-channel supply channel, benefiting the retailer but not the manufacturer. We illustrate how such a contract with a complementary agreement, such as a two-part tariff or a profit-sharing agreement, can coordinate the dual-channel supply chain and enable both the manufacturer and the retailer to be a win–win.

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    Bibliographic Info

    Article provided by Elsevier in its journal Omega.

    Volume (Year): 40 (2012)
    Issue (Month): 5 ()
    Pages: 571-583

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    Handle: RePEc:eee:jomega:v:40:y:2012:i:5:p:571-583

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    Related research

    Keywords: Dual-channel; Stackelberg game; Supply chain coordination; Channel competition; Supply chain contract;

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    Cited by:
    1. Jain, Vipul & Panchal, Gajanan B. & Kumar, Sameer, 2014. "Universal supplier selection via multi-dimensional auction mechanisms for two-way competition in oligopoly market of supply chain," Omega, Elsevier, vol. 47(C), pages 127-137.
    2. Balachandran, Kashi R. & Wang, Hsiao-Wen & Li, Shu-Hsing & Wang, Taychang, 2013. "In-house capability and supply chain decisions," Omega, Elsevier, vol. 41(2), pages 473-484.

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