Corporate social responsibility, coordination and profit distribution in a dual-channel supply chain

Abstract

The dual-channel supply chain model has become increasingly popular in the industry and describes a scenario in which a firm, in addition to selling through the traditional supply chain of manufacturer and retailer, opens a direct channel to the customer through Internet sales. However, in the current global business environment, corporate social responsibility (CSR) is a determining factor of choices of the customers. Based on the above important factors, this article introduces a corporate social responsibility two-echelon dual-channel supply chain. In addition to operating an online channel, the manufacturer intends to increase stakeholders' welfare by exhibiting CSR. The pricing decisions for both the cases of the decentralized and centralized scenarios are studied analytically as well as numerically. The paper also examines the effect of the degree of concern of the manufacturer regarding CSR on product compatibility and discusses feasibility of the successful operation of a dual-channel supply chain. Finally, channel coordination through all unit quantity discounts with the agreement of a franchise fee and surplus profit division through bargaining is discussed analytically.

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