Dual-channel Supply Chain Synchronization with Deterministic and Stochastic Demand under Cost-sharing Contract

Abstract

With the globalization of markets and the advancements in communications, such as the Internet and e-commerce, consumers are directly linked to manufacturers. Consumers can search a product in an offline store and buy it from an online store. This paper investigates the influence channel synchronization on the supplier, the retailer, and the entire supply chain in the dual-channel supply chains. Among synchronization mechanisms, contracts are valuable tools used in both theory and practice to coordinate various supply chains. This study presents a hybrid model with a new demand function and also it surveys the effects of free riding on sales effort in a dual-channel supply chain comprising of one manufacturer and one offline store. Finally, to achieve beneficial outcomes this paper considers a cost-sharing contract to synchronize a dual-channel supply chain. The efficiency of the supply chain can be improved under the stochastic demand solved by the genetic algorithm.

Keywords

• dual-channel supply chain
• sales effort
• free riding
• cost-sharing contract