Dual channel supply chain (DCSC) model with a product return policy considered

Abstract

Dual channel supply chain (DCSC) is a development of the sales media structure that combines two channel, namely offline channel and online channel. In the DCSC model the distribution of products from producers to consumers requires a separate policy in order to attract purchase interest. Policies that can be applied are product returns. Then, constructing the model to maximize the total profit. In maximize the multivariable function the necessary and sufficient conditions are used. The solution of linear equations is the optimal model solution. Based on the model obtained, the values of the parameters take from previous studies. The maximum profit of the implementation is 662052.3 when the sales price from the retailer to consumers through offline channel of 301 and online channel of 292.6. Based on the analysis, we can conclude that the greater the sensitivity of product returns results the greater total profits and the percentage of the number of product returns so that producer can still profit is 13% of many productions.