WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 11, 2014
Pricing and Service Decisions in a Dual-Channel Supply Chain with Manufacturer’s Direct Channel Service and Retail Service
Authors: Lisha Wang, Jing Zhao
Abstract: This paper studies pricing decisions and service decisions of a product in a dual-channel (i.e., the tradi- tional retail channel and direct online channel) supply chain consisting of one manufacturer and one retailer. We consider two types of channel pricing decisions (i.e., consistent pricing and inconsistent pricing) in the scenari- o which the manufacturer holds more bargaining power than the retailer and thus as the Stackelberg leader. By applying a game-theoretical approach, corresponding analytic equilibrium solutions are obtained. At last, we use numerical examples to compare the analytical results and illustrate the impacts of the degree of customer loyalty to the retail channel on the manufacturer and the retailer’s optimal prices, optimal service levels, maximal demands and maximal profits.