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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

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.

Suggested Citation

  • Chen, Jing & Zhang, Hui & Sun, Ying, 2012. "Implementing coordination contracts in a manufacturer Stackelberg dual-channel supply chain," Omega, Elsevier, vol. 40(5), pages 571-583.
  • Handle: RePEc:eee:jomega:v:40:y:2012:i:5:p:571-583 DOI: 10.1016/j.omega.2011.11.005
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