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Pricing and Contract Coordination of BOPS Supply Chain Considering Product Return Risk

Author

Listed:
  • Shujun Yang

    (School of Business, Macau University of Science and Technology, Macao 999078, China)

  • Ivan Kai Wai Lai

    (Faculty of International Tourism and Management, City University of Macau, Macao 999078, China)

  • Huajun Tang

    (School of Business, Macau University of Science and Technology, Macao 999078, China)

Abstract

This study proposes a BOPS (buy online and pick up in store) model for a two-echelon supply chain, considering the product return risk to reach an equilibrium result of two omni-channel integration modes, managed by the manufacturer or the retailer, respectively. Furthermore, this study analyzes the impacts of the service cost coefficient and the consumer loyalty of the offline channel on the optimal price, service decision, and profit of different integration modes. This study also compares the profits of enterprises under centralized and decentralized decisions. The results show that centralized decision making can improve the service level of the SA (Store Assistance) effort and the sustainable performance of the supply chain. Whether the BOPS channel is managed by the manufacturer or retailer, the service cost, the product return rate, and the offline channel consumer loyalty have an impact on the decision of product sale price, wholesale price, and SA effort service level. Offline customer loyalty is less sensitive in the BOPS channel managed by the retailer than that managed by the manufacturer. It is suitable for the manufacturer to manage the BOPS channel when offline customer loyalty is low. Otherwise, it is appropriate for the retailer to manage the BOPS channel. The profit of the supply chain under the decentralized decision is less than that under the centralized decision. When executing a wholesale price contract, different omni-channel integration modes can alleviate the double marginalization effect. It can fully coordinate the supply chain members, motivate retailers to improve the service level of the SA effort, and realize Pareto improvement to support supply chain sustainability.

Suggested Citation

  • Shujun Yang & Ivan Kai Wai Lai & Huajun Tang, 2022. "Pricing and Contract Coordination of BOPS Supply Chain Considering Product Return Risk," Sustainability, MDPI, vol. 14(9), pages 1-21, April.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:9:p:5055-:d:799999
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    References listed on IDEAS

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    Cited by:

    1. Yanwei Chen & Xiaojun Liu & Kaiqing Huang & Huajun Tang, 2022. "Pricing and Service Effort Decisions of Book Dual-Channel Supply Chains with Showrooming Effect Based on Cost-Sharing Contracts," Sustainability, MDPI, vol. 14(18), pages 1-23, September.
    2. Han Wang & Chuan Pang & Huajun Tang, 2023. "Pricing and Carbon-Emission-Reduction Decisions under the BOPS Mode with Low-Carbon Preference from Customers," Mathematics, MDPI, vol. 11(12), pages 1-26, June.

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