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Decision model for dual-channel supply chain considering stochastic demand and free-riding behavior. (Chinese. English summary) Zbl 1389.90038

Summary: In this paper, a dual-channel supply chain composed by one manufacturer and one retailer is studied, in which an identical kind of seasonal product is sold over a finite time horizon. In this setting, a joint inventory and pricing decision is formulated and coordination mechanism is investigated when demand uncertainty in both channels and free-riding behavior between channels are considered. It is proved that the game is supermodular, which indicates that a unique Nash equilibrium (NE) exists in the decentralized mode. For both the manufacturer and retailer, the optimal price and safety stock will be reduced as the number of free-riders increases. By our numerical experiment, It is shown that free-riding behavior always has harm to the retailer but under some circumstances it will have benefit to the manufacturer. Both two-part tariff contract and minimum retail-price-constrained revenue-sharing contract can be used to coordinate this supply chain. In the former one, the profit loss made by free-riding can be reduced for the retailer if he promises to pay more transfer when the manufacturer raises price. In the latter one, the wholesale price will be lower.

MSC:

90B05 Inventory, storage, reservoirs
90B50 Management decision making, including multiple objectives
91A80 Applications of game theory
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