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Pricing and cooperative advertising decisions in a two-echelon dual-channel supply chain

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  • Arash Apornak
  • Abbas Keramati

Abstract

Developments of e-commerce lead manufacturers and retailers to open direct online channel versus traditional channel in the market. In this paper we consider a supply chain consisting of a manufacturer and a retailer evaluate the impact of price schemes and cooperative advertising mechanisms on dual-channel supply chain competition in traditional and direct online channels as its setting by using Nash equilibrium and cooperative game then find the optima value of each decision variable of the study under preferred scenarios. According to the results the value of decision variables in traditional channel is more than direct online channel in both scenario and also in profit improvement part the analyses shows both channel is sensitive to demand. The results of this study can help managers to consider the interplay between the upstream and downstream entities of a dual-channel.

Suggested Citation

  • Arash Apornak & Abbas Keramati, 2020. "Pricing and cooperative advertising decisions in a two-echelon dual-channel supply chain," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 39(3), pages 306-324.
    • Handle: RePEc:ids:ijores:v:39:y:2020:i:3:p:306-324
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