Research on pricing and coordination in dual-channel supply chain with business reputation

Abstract

In order to meet the needs of different customer preferences, the manufacturer opens the direct channel based on the retail channel. In the case of co-existence of dual-channel distribution, a model is built to analyze the problem of pricing competitions between one manufacturer and one retailer under the manufacturer providing business reputation to the retailer in a dual-channel supply chain. By the design of business reputation, we make retailers participate in the competition more actively in dual-channel supply chain, and improve the system order quantity and the operational performance of the dual-channel supply chain. Furthermore, the equilibrium pricing strategies are given by the Stackelberg game theory. The final analysis illustrates the validity of the model by a numerical example. © 2011.