Effect of Demand Referral in Online Retail Supply Chain

Abstract

E-commerce optimizes the full supply chain network as well as satisfying the customer. By adopting Internet marketing and cooperating with infomediary website, traditional retailers can dramatically attract new customers and even lower their sale costs. Considering an online retail supply chain including one referral infomediary and one retailer, the infomediary provides demand referral service to retailer and incentive rebate to customer. A linear dual-channel demand with the effect of customer incentive and horizontal service cooperation model was established, and then the optimal retailing price and service price of retailer and optimal customer rebate of infomediary in Stackelberg decentralized supply chain were analyzed. Moreover, the feasible region of customer incentive effect (parameter k) under individual rational constraint is examined.