Research On Dual-channel Supply Chain Coordination Mechanism Based On Game Analysis

Nowadays, with the rapid development of Internet, a lot of big companies eventuallyfocus on the online shops which could gain high profits, regarding e-business development asthe most important task. The successful operation of online shops means that all the businesscould not only obtain profits from traditional channels, but also satisfy diverse customers’needs taking advantages of Internet. From the perspective of customers, it provides customersanother optional consumption patterns and makes their lives more convenient. However,more and more merchants develop e-business in recent years.As a result, companies becomecompetitive. How to balance manufacturers and retailers’ profits becomes one of hot topics.In recent years, researches have been changed from channel prices and productiondecisions to other important factors in supply chains such as policies implement, servicelevels and so on. Retailers and manufacturers’ implement of coordination policies also play asignificant role on each other’s benefit distribution. Based on the previous studies, this paperstudies manufacturers’ decisions such as prices and lead time when they open online andtraditional channels at the same time and how to achieve the most supply chains’ profits. Thispaper discusses dual-channel supply chains’ development tendency on the basis of gametheory such as Stackelberg model, differential game and evolutionary game. What’s more,this paper analyses the role of different coordination policies on dual-channels. It offersmanagement insights to managers.The analysis of this paper focuses on development routes and optimal decisions by themethods of game theories. Results show that quantity discounts could not coordinatedual-channel supply chain. Two part tariff and wholesale price contracts could coordinatedual-channel, and their effects are the same. Manufacturers could change lead time toimprove optimal order quantity and price policies. At the same time, when retailers pay partof advertising expenses, they could coordinate the supply chain. Brand goodwill changes overtime and the obtaining values of manufacturers and retailers tend to be stable. Our resultsshow that, under different conditions, when manufacturers select investment or bonus andretailers select promotion, dual-channel supply chain develops to diverse direction. Nomatter which strategy manufacturers select, retailers’ frequent promotion would not be evolutionary stable strategy. Varying parameters, dual-channel evolves to different directionsor there are not evolutionary stable strategies for it. This paper provides significantconclusions on dual-channel coordination mechanisms.