Selecting Online Channel Mode for Green Products in a Capital-Constrained Platform Supply Chain

This paper investigates operational decisions and online channel mode selection for green products with an e-commerce supply chain in which the manufacturer is subject to capital constraint. Starting from a Stackelberg game framework where the platform acts as a leader, two different online channel modes applied with an e-commerce supply chain are explored for equilibria, respectively. This paper then extends to a different supply chain with a reversed channel leadership, so as to reveal how the supply chain leaderships affect the equilibriums and supply chain performance. With the analytical studies, several important and interesting insights are derived. For example, but not limited to, the following is found: (a) the equilibrium decisions of the capital-constrained supply chain highly rely on the associated interest rate but are independent of the initial capital level of the financially-constrained manufacturer; (b) the platform and the capital-constrained manufacturer act largely differently when choosing the optimal online channel mode for themselves; (c) a win-win situation benefiting two parties holds when and only when the two members choose the agency mode under certain conditions; (d) the impacts of the supply chain leaderships and online channel modes on the consumer surplus and social welfare are clearly revealed. These results derived in our paper shed lights on industrial practicer on how to effectively make such decision-making in platform economy. The members in an e-commerce supply chain can appropriately determine their decisions such as commission and slotting fee to reach a win-win situation for two parties.