Price, delivery time, and retail service sensitive dual-channel supply chain

Abstract

This study deals with a dual-channel supply chain where the selling price set by each player, delivery time for direct channels, and retail service-dependent demand structures are considered by manufacturers and retailers. In the direct channel, the manufacturer sells products directly to customers within a maximum mentioned delivery time span. The delivery time for products is adjustable according to customers' demand with an extra delivery charge. In the retail channel, customers are additionally benefited by retail services and direct connection with the products. Selling price in the direct market is considered to be lower than the retail-market selling price. The behavior of the proposed model under the integrated system is analyzed. In the decentralized structure, vertical Nash and manufacturer Stackelberg models are also discussed. The sensitivity of the key parameters is examined to test the feasibility of the model. Finally, a numerical example with graphical illustrations is provided to investigate the proposed model.