IDEAS home Printed from https://ideas.repec.org/a/pal/jorapm/v23y2024i2d10.1057_s41272-023-00440-y.html
   My bibliography  Save this article

Optimal online channel configuration for a Manufacturer under price and lead time-sensitive demand

Author

Listed:
  • T. M. Rofin

    (National Institute of Industrial Engineering (NITIE))

  • Sreejith Alathur

    (Indian Institute of Management Kozhikode)

Abstract

The purpose of this paper is to model and compare the performance of online dual-channel supply chain configurations comprising of a Manufacturer and an E-tailer and to identify the optimal configuration under the assumption that demand is both price and lead time sensitive. The study considers two distinct online dual-channel formats, viz. (i) E-tailer–direct online channel (DOC) of the Manufacturer and (ii) E-tailer and an Agency Channel (e-marketplace) of the Manufacturer. The competition between the channels has been modelled with the help of game theory and optimal decisions of the channel members were derived from equilibrium analysis. Further, a numerical analysis was carried out to quantify the optimal decisions and to derive the managerial insights. The study finds that E-tailer–DOC configuration is beneficial for the Manufacturers compared to E-tailer–Agency Channel configuration in the case of products for which customers’ price sensitivity is higher than the lead time sensitivity. However, the Manufacturer is gainful by choosing E-tailer–Agency Channel configuration over E-tailer–DOC configuration in the case of products having higher lead time sensitivity.

Suggested Citation

  • T. M. Rofin & Sreejith Alathur, 2024. "Optimal online channel configuration for a Manufacturer under price and lead time-sensitive demand," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 23(2), pages 121-139, April.
    • Handle: RePEc:pal:jorapm:v:23:y:2024:i:2:d:10.1057_s41272-023-00440-y
    DOI: 10.1057/s41272-023-00440-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41272-023-00440-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1057/s41272-023-00440-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kar, Sumi & Basu, Kajla & Sarkar, Biswajit, 2023. "Advertisement policy for dual-channel within emissions-controlled flexible production system," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    2. He, Peng & He, Yong & Zhou, Li, 2023. "Channel strategies for dual-channel firms to counter strategic consumers," Journal of Retailing and Consumer Services, Elsevier, vol. 70(C).
    3. Matsui, Kenji, 2020. "Optimal bargaining timing of a wholesale price for a manufacturer with a retailer in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 287(1), pages 225-236.
    4. Du, Zhong & Fan, Zhi-Ping & Sun, Fenghao, 2023. "O2O dual-channel sales: Choices of pricing policy and delivery mode for a restaurant," International Journal of Production Economics, Elsevier, vol. 257(C).
    5. Chongping Chen & Xiaopo Zhuo & Yanshan Li, 2022. "Online channel introduction under contract negotiation: Reselling versus agency selling," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(1), pages 146-158, January.
    6. Chatterjee, Swagato & Goyal, Divesh & Prakash, Atul & Sharma, Jiwan, 2021. "Exploring healthcare/health-product ecommerce satisfaction: A text mining and machine learning application," Journal of Business Research, Elsevier, vol. 131(C), pages 815-825.
    7. Vibhanshu Abhishek & Kinshuk Jerath & Z. John Zhang, 2016. "Agency Selling or Reselling? Channel Structures in Electronic Retailing," Management Science, INFORMS, vol. 62(8), pages 2259-2280, August.
    8. Feng Yang & Junjun Kong & Tianzhuo Liu & Sheng Ang, 2022. "Cooperation and coordination in green supply chain with R&D uncertainty," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 73(3), pages 481-496, March.
    9. Zhang, Zhe & Song, Huaming & Shi, Victor & Yang, Shilei, 2021. "Quality differentiation in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 290(3), pages 1000-1013.
    10. Lei Song & Qi Xin & Huilin Chen & Lutao Liao & Zheyi Chen, 2023. "Optimal Decision-Making of Retailer-Led Dual-Channel Green Supply Chain with Fairness Concerns under Government Subsidies," Mathematics, MDPI, vol. 11(2), pages 1-16, January.
    11. Shao, Xiaofeng, 2021. "Omnichannel retail move in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 294(3), pages 936-950.
    12. Baishya, Kuldeep & Samalia, Harsh Vardhan, 2020. "Extending unified theory of acceptance and use of technology with perceived monetary value for smartphone adoption at the bottom of the pyramid," International Journal of Information Management, Elsevier, vol. 51(C).
    13. Neelam Chawla & Basanta Kumar, 2022. "E-Commerce and Consumer Protection in India: The Emerging Trend," Journal of Business Ethics, Springer, vol. 180(2), pages 581-604, October.
    14. Tianwen Chen & Ronghu Zhou & Changqing Liu & Xiang Xu, 2023. "Research on Coordination in a Dual-Channel Green Supply Chain under Live Streaming Mode," Sustainability, MDPI, vol. 15(1), pages 1-23, January.
    15. Tolstoy, Daniel & Nordman, Emilia Rovira & Vu, Uyen, 2022. "The indirect effect of online marketing capabilities on the international performance of e-commerce SMEs," International Business Review, Elsevier, vol. 31(3).
    16. Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
    17. Li, Mengmeng & Mizuno, Shinji, 2022. "Dynamic pricing and inventory management of a dual-channel supply chain under different power structures," European Journal of Operational Research, Elsevier, vol. 303(1), pages 273-285.
    18. Bin Dan & Shuguang Zhang & Maosen Zhou, 2018. "Strategies for warranty service in a dual-channel supply chain with value-added service competition," International Journal of Production Research, Taylor & Francis Journals, vol. 56(17), pages 5677-5699, September.
    19. He, Peng & He, Yong & Xu, Henry, 2019. "Channel structure and pricing in a dual-channel closed-loop supply chain with government subsidy," International Journal of Production Economics, Elsevier, vol. 213(C), pages 108-123.
    20. Heydari, Jafar & Govindan, Kannan & Aslani, Amin, 2019. "Pricing and greening decisions in a three-tier dual channel supply chain," International Journal of Production Economics, Elsevier, vol. 217(C), pages 185-196.
    21. Tian, Chen & Xiao, Tiaojun & Shang, Jennifer, 2022. "Channel differentiation strategy in a dual-channel supply chain considering free riding behavior," European Journal of Operational Research, Elsevier, vol. 301(2), pages 473-485.
    22. Yuqi Li & Desheng Wu & Alexandre Dolgui, 2022. "Optimal trade credit coordination policy in dual-channel supply chain with consumer transfer," International Journal of Production Research, Taylor & Francis Journals, vol. 60(15), pages 4641-4653, August.
    23. Kowalczuk, Pascal & Siepmann (née Scheiben), Carolin & Adler, Jost, 2021. "Cognitive, affective, and behavioral consumer responses to augmented reality in e-commerce: A comparative study," Journal of Business Research, Elsevier, vol. 124(C), pages 357-373.
    24. Xiao, Yujie & Niu, Wenju & Zhang, Lianmin & Xue, Weili, 2023. "Store brand introduction in a dual-channel supply chain: The roles of quality differentiation and power structure," Omega, Elsevier, vol. 116(C).
    25. Yim, Mark Yi-Cheon & Chu, Shu-Chuan & Sauer, Paul L., 2017. "Is Augmented Reality Technology an Effective Tool for E-commerce? An Interactivity and Vividness Perspective," Journal of Interactive Marketing, Elsevier, vol. 39(C), pages 89-103.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matsui, Kenji, 2024. "Should competing suppliers with dual-channel supply chains adopt agency selling in an e-commerce platform?," European Journal of Operational Research, Elsevier, vol. 312(2), pages 587-604.
    2. Sun, Cuiying & Zhang, Xiong & Zhou, Yong-Wu & Cao, Bin, 2022. "Pricing, financing and channel structure for capital-constrained dual-channel supply chains with product heterogeneity," International Journal of Production Economics, Elsevier, vol. 253(C).
    3. Pi, Zhenyang & Fang, Weiguo & Perera, Sandun C. & Zhang, Baofeng, 2022. "Enhancing the online buyer perception of consumer experience products in a dual-channel supply chain: A new role of free-riding," International Journal of Production Economics, Elsevier, vol. 253(C).
    4. Wen-Bin Wang & Qiang Sun & Xiu-Xia Yan & Yuan-Qing Liu, 2022. "Dual-Channel Supply Chain Financing Operation Strategy Considering Free-Riding Effect under Different Power Structures," Sustainability, MDPI, vol. 14(15), pages 1-27, July.
    5. Zhao, Qingli & Fan, Zhi-Ping & Sun, Minghe, 2024. "Manufacturer blockchain technology adoption strategies for different sales channels in an e-commerce platform supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 185(C).
    6. Wei, Jie & Chang, Meijing, 2023. "Are price matching and logistics service enhancement always effective strategies for improving profitability?," European Journal of Operational Research, Elsevier, vol. 307(1), pages 103-115.
    7. Cao, Kaiying & Xu, Yuqiu & Hua, Ye & Choi, Tsan-Ming, 2023. "Supplier or co-optor: Optimal channel and logistics selection problems on retail platforms," European Journal of Operational Research, Elsevier, vol. 311(3), pages 971-988.
    8. Hu, Xiaoqing & Cai, Jianhu & Yue, Xiaohang, 2024. "Power structure preferences in a dual-channel supply chain: Demand information symmetry vs. asymmetry," European Journal of Operational Research, Elsevier, vol. 314(3), pages 920-934.
    9. Dong, Shuang & Qin, Zhongfeng & Yan, Yingchen, 2022. "Effects of online-to-offline spillovers on pricing and quality strategies of competing firms," International Journal of Production Economics, Elsevier, vol. 244(C).
    10. Peng He & Tong-Yuan Wang & Qi Shang & Jun Zhang & Henry Xu, 2024. "Knowledge mapping of e-commerce supply chain management: a bibliometric analysis," Electronic Commerce Research, Springer, vol. 24(3), pages 1889-1925, September.
    11. Syed Asif Raza, 2022. "A bibliometric analysis of pricing models in supply chain," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(2), pages 228-251, April.
    12. Tong, Yang & Lu, Tao & Li, Yina & Ye, Fei, 2023. "Encroachment by a better-informed manufacturer," European Journal of Operational Research, Elsevier, vol. 305(3), pages 1113-1129.
    13. Kittaka, Yuta & Matsushima, Noriaki & Saruta, Fuyuki, 2022. "Negative effect of price-matching policy on traditional retailers in a dual-channel supply chain with different content formats," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    14. Zhong, Yuanguang & Yang, Tong & Yu, Huilin & Zhong, Shuneng & Xie, Wei, 2023. "Impacts of blockchain technology with government subsidies on a dual-channel supply chain for tracing product information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 171(C).
    15. Wang, Ronghui & Nan, Guofang & Kou, Gang & Li, Minqiang, 2023. "Separation or integration: The game between retailers with online and offline channels," European Journal of Operational Research, Elsevier, vol. 307(3), pages 1348-1359.
    16. Yu Xia & Rongrong Shang & Mingxia Wei & Zhenke Wei, 2024. "Optimal pricing and financing decision of dual-channel green supply chain considering product differentiation and blockchain," Annals of Operations Research, Springer, vol. 338(2), pages 1317-1358, July.
    17. Du, Ningning & Yan, Yingchen & Qin, Zhongfeng, 2023. "Analysis of financing strategy in coopetition supply chain with opportunity cost," European Journal of Operational Research, Elsevier, vol. 305(1), pages 85-100.
    18. Sarkar, Biswajit & Kar, Sumi & Pal, Anita, 2024. "Does the bullwhip effect really help a dual-channel retailing with a conditional home delivery policy?," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    19. Feng, Lipan & Jin, Minyue, 2022. "Platform vs. Manufacturer: Who should implement innovation in e-commerce supply chains?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 166(C).
    20. Liu, He & Xu, Tianting & Jing, Shuai & Liu, Zhidong & Wang, Shouyang, 2023. "The interplay between logistics strategy and platform’s channel structure design in B2C platform market," European Journal of Operational Research, Elsevier, vol. 310(2), pages 812-833.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorapm:v:23:y:2024:i:2:d:10.1057_s41272-023-00440-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.