Ordering Strategy And Coordination Contracts In Dual Supply Channels With Stock-out Substitution

With the rapid development of e-commerce and the maturity of electronic payment means,network consunption has been developing rapidly in a few years.More and more enterprises change from traditional retailers' distribution mode to Internet based dual-channel or multi-channel sales model However,the conflict between channels of supply chain is unavoidable for the stock-out substitutability between channels.We consider a dual-channels supply chain in which manufacturer has an e-tail channel and retailer has a traditional retail channel Each of the two channels faces a stochastic demand.When a stock-out occurs in either channel,customers will shift to the other channel with a known probability.We discuss the impacts of the stock-out substitution rate on optimal order quantities and both parties' earnings.A numerical example is used to analyze the difference between the rate of stock-out substitution and the influence of joint change on the quantity of the two channel order.According to the problems faced by retailers,the corresponding coordination mechanism is put forward.The objective of this paper is to improve the competitiveness of dual-channels supply chain and the competitiveness of each member,it can provide practical guidance for enterprises facing dual channel competition.The main research contents and conclusions are as follows:Firstly,the order quantity of the two channels changes inversely with the increase of stock-out substitution rate,and when the stock-out substitution rate increases at the same time,at least one channel will increase its order quantity,and the total order quantity of the supply chain system changes greatly;Secondly,the two dual-channel revenue models:with channel competition and without channel competition,has established to analyze the relationship between the two cases and the impact of the stock-out substitution rate on the relationship.The study found that in the situation that traditional channel substitution rate is greater than the e-tail channel substitution rate,the retailer's revenue is always less than the income of no channel competition.However,the total income of the dual channel supply chain increases with the increase of channel competition,and the substitution rate of the traditional channel is more significant;Thirdly,based on the results above,we find that demand competition between channels will damage the interests of retailers.A buyback contract is designed from the point of view that the retailer's income is no less than the income when there is no channel competition.Through the construction and analysis of the model,we proved that when the buyback compensation value is within a certain range,it can achieve win-win cooperation between retailer and manufacturer,and there is the best buyback compensation at the same time,which makes the manufacturer's maximum revenue.