A Design of a Dual Channel Supply Chain with Optimal Price and Product Quality

doi:10.3969/j.issn.1007-7375.2019.01.006

Abstract

Abstract: A joint price and product quality decision problem is investigated in which product quality is endogenous and customers have different acceptance of direct channel and retail channel. Considering that the supply chains can be centralized or decentralized, the price equilibrium decision, the product quality level and profit between manufacturer and retailer are compared under three models, and the channel strategy and optimal price of retailer and manufacturer analyzed. The results show that:compared with the traditional retail channel, in centralized decision, the manufacturer, by adding a direct channel, does not change the retailer's price, but can improve the product quality level and the profit of the supply chain; and in decentralized decision, the manufacturer, by adding a direct channel, will reduce the wholesale price, retailer's price and product quality level of the product. In addition, the direct channel may not always be detrimental to the retailer.

Key words: supply chain management, game, customer acceptance of a direct channel, quality endogenous, dual channel

CLC Number:

F253

HUANG Fu, SONG Huaming, YANG Hui, WANG Lisha, MA Dongsheng, WU Jiawei. A Design of a Dual Channel Supply Chain with Optimal Price and Product Quality[J]. Industrial Engineering Journal , 2019, 22(1): 45-52.

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