Price and lead time decisions in dual-channel supply chains

Manufacturers today are increasingly adopting a dual channel to sell their products, i.e., the traditional retail channel and an online direct channel. Empirical studies have shown that service quality (we focus on the delivery lead time of the direct channel) even goes beyond product price as one of the major factors influencing consumer acceptance of the direct channel. Delivery lead time has significant effects on demand, profit, and pricing strategy. However, there is scant literature addressing the decision on the promised delivery lead time of a direct channel and its impact on the manufacturer’s and retailer’s pricing decisions. To fill this gap, we examine the optimal decisions of delivery lead time and prices in a centralized and a decentralized dual-channel supply chain using the two-stage optimization technique and Stackelberg game, and analyze the impacts of delivery lead time and customer acceptance of a direct channel on the manufacturer’s and retailer’s pricing behaviours. We analytically show that delivery lead time strongly influences the manufacturer’s and the retailer’s pricing strategies and profits. Our numerical studies reveal that the difference between the demand transfer ratios in the two channels with respect to delivery lead time and direct sale price, customer acceptance of the direct channel, and product type have great effects on the lead time and pricing decisions.     

Managing a dual-channel supply chain under price and delivery-time dependent stochastic demand

Several leading manufacturers recently combined the traditional retail channel with a direct online channel to reach a wider range of customers. We examine such a dual-channel supply chain under price and delivery-time dependent stochastic customer demand. We consider five decision variables, the price and order quantity for both the retail and the online channels and the delivery time for the online channel. Uncertainty frequently arises in both retail and online channels and so additional inventory management is required to control shortage or overstock and that has an effect on the optimal order quantity, price, and lead time. We developed mathematical models with the profit maximization motive. We analyze both centralized and decentralized systems for unknown distribution function of the random variables through a distribution-free approach and also for known distribution function. We examine the effect of delivery lead time and customers’ channel preference on the optimal operation. For supply chain coordination a hybrid all-unit quantity discount along a franchise fee contract is used. Moreover, we use the generalized asymmetric Nash bargaining for surplus profit distribution. A numerical example illustrates the findings of the model and the managerial insights are summarized for centralized, decentralized, and coordinated scenarios.     

Inventory competition in a dual-channel supply chain with delivery lead time consideration

Aimed at the inventory competition of perishable products in a dual-channel supply chain with consideration of the delivery lead time in the online direct channel, we extend the Newsvendor model considering stock-out-based consumer switching behavior to include the delivery lead time. We examine the retailer's optimal order quantity decision in the retail channel and the manufacturer's optimal inventory level decision in the online direct channel, explore the manufacturer's optimal delivery lead time decision in the online direct channel, discuss the impact of the product price and consumer switching behavior on the optimal decisions of supply chain members, and compare the optimal decisions between decentralized and centralized scenarios. The results show that, compared with the centralized scenario, at least one of the supply chain members will overstock in the decentralized scenario and that consumers in the online direct channel enjoy a shorter delivery lead time and hence better service in the decentralized scenario. Finally, we present numerical examples to analyze the impact of relevant parameters on the supply chain members’ profits and the supply chain efficiency.     

The impact of customer returns on supply chain decisions under various channel interactions

We examine a supply chain in which a manufacturer supplies a single product to a retailer who faces two forms of customer returns. We compare the impact of these two forms of customer returns on the decisions and profits of the manufacturer and the retailer under various types of channel interaction: Manufacturer Stackelberg (MS), Vertical Nash (VN), and Retailer Stackelberg (RS). We find that when the level of customer returns that are proportional to quantity sold is extremely high, the retailer prefers the MS rather than the RS channel interaction. We also examine the impact of the asymmetric customer returns information on the decisions of the manufacturer and the retailer and on profits under MS and VN channel interactions. We show that in the MS case, the retailer can decide whether or not to share customer returns information with its manufacturer without knowing the manufacturer’s estimates of customer returns and in the VN case, both the retailer and the manufacturer can decide whether or not to share/acquire the information based on observation of the other’s behavior. The issues of sharing this information are also discussed.     

基于在线评论的多个竞争制造商和零售商的产品定价策略

在线评论作为一种产品信息传播载体,越来越受到网上电商及消费者的重视,并在很大程度上影响消费者的购买决策。本文在多个竞争性制造商为在线零售商提供可替代性产品并通过零售商销售给网络消费者的电子商务环境下,研究在线评论信息如何影响网络消费者购买决策及在线零售商和制造商的定价策略。以neo-Hoteling模型为基础,构建了依赖零售渠道在线评论的消费者选择模型,并通过模型求解定量分析了二级供应链结构分散系统下在线评论对多个竞争性制造商及零售商最优决策的影响。得到当制造商基于评论制定最优定价策略时,在线评论对市场竞争强度没有影响,但决定潜在市场大小;各产品的均衡批发价及销售价按一定的比例随评论揭示的该产品与其他产品质量均值之差(正或负)增加或减少,评论信息通常会使制造商因好评而获利,由于评论增加了不同产品需求的不对称性,零售商因而具有更大的调价空间,往往通过提高(降低)占据有利(不利)评论的产品价格获得更高的利润。     

多渠道供应链中的跨渠道退货服务策略研究

考虑在一个多渠道供应链结构中,零售商同时拥有实体店和网店,制造商开设直营网店且通过双渠道零售商销售产品。考虑消费者的无产品质量退货现象,研究了双渠道零售商为消费者提供跨渠道退货服务的多渠道整合问题。揭示了零售商愿意提供跨渠道退货服务的条件,探讨了跨渠道退货服务策略对市场均衡的影响,并且构建了制造商和零售商之间基于横向合作处理消费者退货的供应链机制,以改善双方的利润。     

线上分类回收平台的道德风险决策研究

线上回收模式采用"线上分类交易+线下物流"机制,可大幅提高交易效率,然而也面临严重的信任危机。掌握回收平台的道德风险决策机理,对于解决行业困境至关重要。考虑一个线上回收平台向顾客收购两个等级旧产品的交易系统,其中顾客可能低估或高估持有产品等级。平台存在道德风险从顾客低估中获利;顾客可利用逆向选择规避该风险。基于Stackelberg博弈模型,研究了顾客的订单提交决策和平台的最优道德风险概率决策。分析结果表明,平台并非总是存在不诚实动机,取决于产品质量分布以及双方争价的相对成本。研究结论对线上回收模式的监管和规范具有较强的管理启示。     

On the management of life insurance company risk by strategic choice of product mix,investment strategy and surplus appropriation schemes

The aim of this paper is to analyze the impact of management’s strategic choice of asset and liability composition in life insurance on shortfall risk and the shareholders’ fair risk charge. In contrast to previous work, we focus on the effectiveness of management decisions regarding the product mix and the riskiness of the asset side under different surplus appropriation schemes. We propose a model setting that comprises temporary life annuities and endowment insurance contracts. Our numerical results show that the effectiveness of management decisions in regard to risk reduction strongly depends on the surplus appropriation scheme offered to the customer and their impact on guaranteed benefit payments, which thus presents an important control variable for the insurer.     

Strategic response to pollution taxes in supply chain networks: Dynamic,spatial, and organizational dimensions

This paper presents a model of the strategic behavior of firms operating in a spatial supply chain network. The manufacturing and retailing firms engage in an oligopolistic, noncooperative game by sharing customer demand such that a firm’s decisions impact the product prices, which in turn result in changes in all other firms’ decisions. Each firm’s payoff is to maximize its own profit and we show that, in response to such changes in prices and to exogenous environmental taxes, the manufacturing firms may strategically alter a variety of choices such as ’make-buy’ decisions with respect to intermediate inputs, spatial distribution of production, product shipment patterns and inventory management, environmental tax payment vs recycling decisions, and timing of all such choices to sustainably manage the profit and the environmental regulations. An important implication is that effects of a tax depends on the oligopolistic game structure. With respect to methods, we show that this dynamic game can be represented as a set of differential variational inequalities (DVIs) that motivate a computationally efficient nonlinear complementarity (NCP) approach that enables the full exploitation of above-mentioned salient features. We also provide a numerical example that confirms the utility of our proposed framework and shows substantial strategic reaction can be expected to a tax on pollution stocks.     

双寡头垄断下全渠道竞争优化策略

引入包含线上购买线下取货(buy online and pick up in store, BOPS)的全渠道策略,在随机和确定性需求下分别构建双寡头Nash均衡博弈模型,得出在线下-线上和BOPS-线上等不同渠道下双寡头企业的最优库存策略。通过分析不同的渠道,进一步探讨了双寡头企业产品定价的差异对最优线下库存的影响。结果表明,BOPS作为一种新的零售模式,通过提供库存的可用性信息,显著降低了顾客承担的缺货风险,既可以增加顾客的访问量,还可以增加交叉收益;同时,零售商是否提供BOPS,将显著影响顾客的渠道选择。     

Effect of global FCFS and relative load distribution in two-class queues with dedicated servers

In this paper, we investigate multi-class multi-server queueing systems with global FCFS policy, i.e., where customers requiring different types of service—provided by distinct servers—are accommodated in one common FCFS queue. In such scenarios, customers of one class (i.e., requiring a given type of service) may be hindered by customers of other classes. The purpose of this paper is twofold: to gain (qualitative and quantitative) insight into the impact of (i) the global FCFS policy and (ii) the relative distribution of the load amongst the customer classes, on the system performance. We therefore develop and analyze an appropriate discrete-time queueing model with general independent arrivals, two (independent) customer classes and two class-specific servers. We study the stability of the system and derive the system-content distribution at random slot boundaries; we also obtain mean values of the system content and the customer delay, both globally and for each class individually. We then extensively compare these results with those obtained for an analogous system without global FCFS policy (i.e., with individual queues for the two servers). We demonstrate that global FCFS, as well as the relative distribution of the load over the two customer classes, may have a major impact on the system performance.     

Impact of channel power and fairness concern on supplier’s market entry decision

In a two-stage supply chain comprising a supplier and a retailer, we incorporate the concepts of channel power and fairness concern to analyze the supplier’s decision on whether to open an online direct channel or not. With an online channel, the supplier competes with its retailer in a dual-channel system, but the retailer may shift part or all orders to another supplier as the counteraction. Otherwise, the supplier only obtains the wholesaling profit but loses that from the online market. Taking the retail prices and the quality of the online product as decision variables, we show that the introduction of a direct channel leads to the decline of online product’s quality and retail price. Interestingly, we find that the retailer’s profit may be decreasing in its channel power. Comparing the outcomes with those from pure competing channels, we find that the retailer’s order shifting strategy may result in a lose–lose situation for the two firms, but it can be a credible threat to the supplier’s market entry. We also find that the supplier’s fairness concern may effectively reduce its incentives to open an online channel.     

Artificial intelligence-based inventory management: a Monte Carlo tree search approach

The coordination of order policies constitutes a great challenge in supply chain inventory management as various stochastic factors increase its complexity. Therefore, analytical approaches to determine a policy that minimises overall inventory costs are only suitable to a limited extent. In contrast, we adopt a heuristic approach, from the domain of artificial intelligence (AI), namely, Monte Carlo tree search (MCTS). To the best of our knowledge, MCTS has neither been applied to supply chain inventory management before nor is it yet widely disseminated in other branches of operations research. We develop an offline model as well as an online model which bases decisions on real-time data. For demonstration purposes, we consider a supply chain structure similar to the classical beer game with four actors and both stochastic demand and lead times. We demonstrate that both the offline and the online MCTS models perform better than other previously adopted AI-based approaches. Furthermore, we provide evidence that a dynamic order policy determined by MCTS eliminates the bullwhip effect.

     

不同博弈框架下多竞争零售商的双渠道供应链定价决策研究

在Bertrand竞争、Stackelberg竞争及集中决策下,研究由单制造商与多竞争零售商组成的双渠道供应链的定价决策问题。运用两阶段优化技术、博弈论及矩阵论,讨论了多竞争零售商与单制造商在价格方面相互竞争的问题,给出不同市场竞争模式及集中决策下供应链成员的博弈均衡解。对比不同博弈框架及集中决策下供应链成员的定价决策,通过数值实验分析了价格敏感度及零售商个数对最优定价决策和最大利润影响,给出一些管理学理论与见解,为双渠道供应链中各成员的管理者制定最优决策提供理论支持。     

考虑线下渠道时销售商在团购网站上的最优销售策略研究

基于团购网站和销售商的典型合作模式,考虑了团购网站和线下市场的相互影响,用非线性优化理论为基础以销售商制定团购上限和团购项目定价为决策变量,考虑团购价格和最低团购数量的约束条件,建立模型优化,求解出销售商推出团购项目的最优策略。考虑到团购网站下限和团购网站销售成本以及网上销售的广告效用,分析了销售商是否应该制定团购上限,如何结合团购项目定价制定团购上限。探讨了在线低价限量销售的优势,以及顾客转移购买率和团购下限对销售商策略选择的影响。通过和单一线下渠道的最优销售策略相比较,得出销售商推出团购项目的前提条件。同时为团购网站运营商如何引导销售商推出低价团购项目提供了管理启示。     

Customer rebates and retailer incentives in the presence of competition and price discrimination

Promotions are important tools for matching supply and demand in many industries. In the United States automotive industry, promotions are frequently offered, which may be given directly to customers (rebates) or given to dealers (incentives) to stimulate demand. We analyze the performance of customer rebate and retailer incentive promotions under competition. We study a setting with two manufacturers making simultaneous pricing and promotion decisions, and with two price-discriminating retailers as Stackelberg followers making simultaneous order quantity decisions. In the benchmark case with no promotions, we characterize the equilibria in closed form. We find that retailer incentives can be used by manufacturers to simultaneously improve each of their profits but can potentially lead to lower retailer profits. When manufacturers use customer rebates, we show that a manufacturer is able to decrease the profit of her competitor while increasing her own profit, although she is also at risk for her competitor to use rebates in a similar fashion. Unlike the monopoly case where the manufacturers are always better off with retailer incentives, customer rebates can be more profitable under some cases in the presence of competition. Using numerical examples we generate insights on the manufacturers’ preference of promotions in different market settings.     

Supply chain performance and consumer surplus under alternative structures of channel dominance

Supply chain partnerships exhibit varying degrees of power distribution among the agents. This has implications for pricing and operational decisions in the channel and eventually influences the end customers. To understand how different power schemes affect the supply chain partners’ performance and consumer surplus, we study channel structures with a dominant manufacturer, a dominant retailer, and no single-agent dominance. Under random and price sensitive demand, channel dominance is interpreted in our setting as exerting power to determine the retail and wholesale prices as well as to transfer the inventory risk to the weaker party. We analyze all problems in a game-theory based framework and characterize the equilibrium retail price, wholesale price, and order/production quantity. We show that the manufacturer-dominated channel structure leads to the highest production quantity, the lowest retail price, and the largest expected surplus for an individual buyer; on the other hand, the entire channel profit and the total consumer surplus are highest when the retailer holds the channel dominance. While both the manufacturer and the retailer are better off when they become a power agent individually, channel dominance does not always guarantee higher share of channel profits, as we show under the manufacturer-dominated structure. Further insights are derived analytically and numerically from comparisons of the manufacturer/retailer dominance schemes with the no single-agent dominance structure and integrated channel. We also study extensions to investigate the effect of demand model and risk sharing, and we address industry settings with alternative schemes of holding cost, shortage penalty and salvage value.     

The impact of environmental constraints on short term harvesting: Use of planning tools and mathematical models

Both in New Zealand and Chile there exist important forest industries based mostly on pine plantations. The management of harvesting requires a series of activities such as building access roads, harvesting with skidders on flat terrain and cable logging for steep terrain, transportation from forest origins to destinations, such as a port, pulp plant and sawmills.These harvesting activities imply some potentially harmful environmental impacts such as water sedimentation, erosion and loss of scenic beauty. This has led to the proposal of several mitigating actions, such as creating riparian strips along rivers, avoiding the use of heavy machinery on fragile soils and minimizing road building.The degree of implementation of these mitigating actions differs in Chile and New Zealand. In New Zealand, the 1991 Resource Management Act regulated the implementation of environmental protection measures. In Chile a series of such measures have been implemented, but a set of definite regulations has not been defined yet and there is a need to develop an economic evaluation of the implementation of environmental measures in terms of reduced timber production and high harvesting costs, together with the benefits to the environment. To support decisions at tactical and operational levels, mathematical models have been developed both in Chile and New Zealand and are being used successfully by the timber industries. These models can be modified to consider diverse environmental protection measures. We analyze the implementation of these modifications and how the new models can help evaluate the economic impact of the protection measures. We show some preliminary results.     

Selective and periodic inventory routing problem for waste vegetable oil collection

We consider a biodiesel production company that collects waste vegetable oil from source points that generate waste in large amounts. The company uses the collected waste as raw material for biodiesel production. The manager of this company needs to decide which of the present source points to include in the collection program, which of them to visit on each day, which periodic routing schedule to repeat over an infinite horizon and how many vehicles to operate such that the total collection, inventory and purchasing costs are minimized while the production requirements and operational constraints are met. For this selective and periodic inventory routing problem, we propose two different formulations, compare them and apply the better performing one on a real-world problem with 36 scenarios. We generate lower bounds using a partial linear relaxation model, and observe that the solutions obtained through our model are within 3.28% of optimality on the average. Several insights regarding the customer selection, routing and purchasing decisions are acquired with sensitivity analysis.     

Supply chain structure in a market with deceptive counterfeits

Deceptive counterfeits differ from non-deceptive ones in that they are packaged and sold as authentic brand name products so that consumers may buy counterfeits unknowingly. When a distribution channel, referred to as the general channel, has been penetrated with deceptive counterfeits, a brand name company may need to restructure the way its products are distributed and rely on reliable channels such as certified stores or manufacturer-owned stores to guarantee 100% authenticity. In this paper, we first identify the conditions under which the general channel will carry deceptive counterfeits, and then analyze the optimal supply chain structure in the presence of counterfeits as well as by incorporating the wholesale price decisions, consumers’ risk attitude towards counterfeits and consumer loyalty towards the reliable stores. Our main finding is that the brand name company should continue to sell, sometimes exclusively, through the general channel despite deceptive counterfeiting under various conditions.