A Study Of Service Level And Pricing Policy In Dual Channel Supply Chain

With the rapid development of the Internet, selling through the Internet is applied by many companies. E-commerce possesses a lot of characteristics that the conventional business does not have. For example, distributors communicate with customers and sell products via websites in circumstance of e-commerce, and in this way can the distributors save cost of leasing and managing sites. Nevertheless, the traditional way also owns some features that e-commerce can hardly realize. For instance, customers can touch and use the products which make them feel safer than buying through the Internet. For this reason, the dual-channel supply chain emerges. The dual-channel supply chain is a kind of supply chain that has two sales channels, which are managed by two groups, say the manufacturer and the retailer, separately. The manufacturer and the retailer compete with each other, and make decisions under the different inventory management model or different gambling way. As a result of the fierce competition, both the price and the customer service have become the main way to cope with the other groups. This paper mainly studies the problem about a dual-channel system including a manufacturer and a retailer. We developed a model taking revenue of the supply chain as the objective function.First, we summarized the current research of dual-channel supply chain management, and point out the deficiencies.Second, we built five mathematical models under different situations,then, studied and simulated them. The results demonstrate that the price and service have a great influence on the yield and the distributional mode with sharing yields does increase the revenue.Third, we pointed out that the optimal price is in positive correlation with service level, but there are exceptions.Forth, the research shows that, cooperation can help to gain yield, however, members in the dual-channel supply chain are usually competing rather than collaborate with others. In view of this, the conclusions in the paper are valuable suggestion to the sellers to make decisions.Finally, we indicated the weak points and new trends and direction of research in the future.