Channel characteristics and coordination in three-echelon dual-channel supply chain

Abstract

We explore the impact of channel structure on the manufacturer, the distributer, the retailer and the entire supply chain by considering three different channel structures in radiance of with and without coordination. These structures include a traditional retail channel and two manufacturer direct channels with and without consistent pricing. By comparing the performance of the manufacturer, the distributer and the retailer, and the entire supply chain in three different supply chain structures, it is established analytically that, under some conditions, a dual channel can outperform a single retail channel; as a consequence, a coordination mechanism is developed that not only coordinates the dual channel but also outperforms the non-cooperative single retail channel. All the analytical results are further analysed through numerical examples.

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