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Cross sales in supply chains: An equilibrium analysis

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  • Wu, Chongqi
  • Mallik, Suman

Abstract

Consider a supply chain system with two manufacturers, each producing a single substitutable product. The products are sold through two retailers, each to be privately owned or owned by the manufacturer. A manufacturer is free to use a single retailer or both. We define cross sales to be the situation where at least one retailer sells both products and analyze the cross sales in channels with different degree of vertical integration. We show that cross sale will happen in quantity competition or in a capacity constrained price competition. However, cross sales may never happen in a pure Bertrand price competition.

Suggested Citation

  • Wu, Chongqi & Mallik, Suman, 2010. "Cross sales in supply chains: An equilibrium analysis," International Journal of Production Economics, Elsevier, vol. 126(2), pages 158-167, August.
    • Handle: RePEc:eee:proeco:v:126:y:2010:i:2:p:158-167
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    Cited by:

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    3. Xiaojing Li & Xingzheng Ai, 2021. "A choice of selling format in the online marketplace with cross-sales supply chain: Platform selling or traditional reselling?," Electronic Commerce Research, Springer, vol. 21(2), pages 393-422, June.
    4. Angelika Endres-Fröhlich, 2022. "The Impact of Product Differentiation on the Channel Structure in a Manufacturer-Driven Supply Chain," Working Papers Dissertations 92, Paderborn University, Faculty of Business Administration and Economics.
    5. Yang, Rui & Tang, Wansheng & Dou, Mengdi & Zhang, Jianxiong, 2021. "Pricing and investing in co-creation with customers for a duopoly," International Journal of Production Economics, Elsevier, vol. 237(C).
    6. Li, Bai-Xun & Zhou, Yong-Wu & Li, Ji-zi & Zhou, Shi-ping, 2013. "Contract choice game of supply chain competition at both manufacturer and retailer levels," International Journal of Production Economics, Elsevier, vol. 143(1), pages 188-197.
    7. Shangyu Pi & Yang Wang, 2020. "An E-Tailer’s Operational Strategy under Different Supply Chain Structures," Sustainability, MDPI, vol. 12(5), pages 1-20, March.
    8. Lixi Zhou & Tijun Fan & Jie Yang & Lihao Zhang, 2022. "Monopolistic vs. Competitive Supply Chain Concerning Selection of the Platform Selling Mode in Three Power Structures," Sustainability, MDPI, vol. 14(17), pages 1-27, September.

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