Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/9630
Title: Price and lead time decisions in dual-channel supply chains
Authors: Hua, G
Wang, S
Cheng, TCE 
Keywords: Dual channel
E-commerce
Game theory
Internet/direct marketing
Supply chain management
Issue Date: 2010
Publisher: Elsevier
Source: European journal of operational research, 2010, v. 205, no. 1, p. 113-126 How to cite?
Journal: European journal of operational research 
Abstract: Manufacturers today are increasingly adopting a dual channel to sell their products, i.e., the traditional retail channel and an online direct channel. Empirical studies have shown that service quality (we focus on the delivery lead time of the direct channel) even goes beyond product price as one of the major factors influencing consumer acceptance of the direct channel. Delivery lead time has significant effects on demand, profit, and pricing strategy. However, there is scant literature addressing the decision on the promised delivery lead time of a direct channel and its impact on the manufacturer's and retailer's pricing decisions. To fill this gap, we examine the optimal decisions of delivery lead time and prices in a centralized and a decentralized dual-channel supply chain using the two-stage optimization technique and Stackelberg game, and analyze the impacts of delivery lead time and customer acceptance of a direct channel on the manufacturer's and retailer's pricing behaviours. We analytically show that delivery lead time strongly influences the manufacturer's and the retailer's pricing strategies and profits. Our numerical studies reveal that the difference between the demand transfer ratios in the two channels with respect to delivery lead time and direct sale price, customer acceptance of the direct channel, and product type have great effects on the lead time and pricing decisions.
URI: http://hdl.handle.net/10397/9630
ISSN: 0377-2217
EISSN: 1872-6860
DOI: 10.1016/j.ejor.2009.12.012
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