Study on Dual-Channel Supply Chain Coordination of Drop Shipping by the E-tailer

Abstract

Abstract: A model of drop shipping by the e-tailer is proposed, in which the manufacturer sends its customer orders to the e-tailer and e-tailer fulfills the orders. Then a dualchannel model is established, comprising of an e-tailer and a manufacturer which owns electronic channel. And the e-tailer is a leader in Stackelberg game. The dual-channel supply chain system is inefficient after analyzing and comparing the profits of a centralized system and a decentralized system. Then a reverse revenuesharing contract is confirmed to coordinate the dual-channel supply chain. Finally, a numerical example indicates that a range of the sharingfactors can achieve the dual-channel supply chain coordination.

Key words: drop shipping, dual-channel supply chain, revenue-sharing contract

Zhang Guang-ming, Zhao Shi-nan. Study on Dual-Channel Supply Chain Coordination of Drop Shipping by the E-tailer[J]. Industrial Engineering Journal , 2014, 17(6): 77-82.

References

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