The impacts of quick response in a dual-channel supply chain

Abstract

We consider the quick response (QR) in a dual-channel supply chain in which a manufacturer sells products through both its own direct channel and a retailer. With QR, the retailer has an opportunity to reorder after the random demand is realized and the manufacturer is able to reproduce after that. We characterize the equilibrium decisions for each channel and investigate the impacts of QR on the decisions and profits. Through numerical analysis, we show that QR may be beneficial to the manufacturer whereas either increases or decreases the optimal expected profit of the retailer. In addition, the supply chain is able to achieve Pareto improvement with QR under certain conditions.