Service Decisions in a Two-Echelon Retailing System with Customer Returns (original) (raw)
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Optimal cross-channel return policy in dual-channel retailing systems
International Journal of Production Economics, 2019
Many dual-channel retailers sell their products through both a physical store and an online store. Allowing unsatisfactory online purchases to be cross-returned to the physical store together with same-channel returns is one of the practical strategies used in the dual-channel retailing industry. Many of those returns are intact and undamaged and, thus, can be resold. But there is a lack of the research on how those resalable returns impact the order quantities of each channel. In this paper we study and compare four different return policies where a dualchannel retailer offers both same-and cross-channel returns. For each return policy, we propose mathematical models to determine optimal order quantities that account for the impact of resalable returns. Several insights on the different cross-channel return policies and some properties of the optimal solutions are presented.
This paper explores characteristics of three different channel structures of three-echelon supply chain, namely a traditional retail channel; a manufacturer's dual-channel and a retailer's dual-channel. In the dual-channel setting, a manufacturer operates retail channel through a distributor and a retailer while either the manufacturer or the retailer operates the direct e-channel. Mathematical models for both non-cooperative and cooperative decisions are developed. Optimal pricing policies of all the proposed models are analyzed with theory. It has been showed that in three echelon supply chain, introduction of dual channel is not always profitable for the channel members compared to single retail channel. Optimal price of the product is always greater in single retail channel compared to retail prices in both the dual channels. To eliminate channel conflicts of non-cooperative supply chain, a two-way price discount mechanism is used to coordinate both the dual channels. It is analytically found that the retailer has opportunity to gain more profits in own dual-channel and in non-cooperative single retail channel instead of manufacturer dual channel. The distributor also prefers the retailer's dual-channel compared to the manufacturer's dual-channel. All analytical results are illustrated numerically.
Managing sales return in dual sales channel: its product substitution and return channel analysis
Although many efforts have been devoted in exploring dual sales channel (DSC) financial performance, the issue of managing its sales return is still lacking attention. Mismanagement in such online return handling may threaten channel profitability. Therefore, we propose three scenarios: first, the benchmark scenario is a lost-sales consideration model, the second one is an online facility return scenario, which represents the availability of an online facility to provide product substitution and in accommodating online customer preference to return the product through a conventional store, a conventional store return scenario is also prepared as the third scenario. The first two scenarios cope with the importance of product substitution; meanwhile, the second and the third ones examine the selection of the sales return channel. By analysing the equilibrium values of the total and partial profits given by the channel prices as the primary decision variables under Bertrand and Stackelberg schemes, some beneficial insights for managing a DSC by considering its sales return are provided.
Optimization of a Dual-Channel Retailing System with Customer Returns
2018
Dual-Channel Retailer with Customer Returns, vi different strategies, and propose models to determine optimal order quantities for each strategy when a dual-channel retailer offers both same and cross-channel returns. Several decision making insights on choosing between the different cross-channel return strategies and some properties of the optimal solutions are presented. From the retailer's perspective of outsourcing the e-channel's management to a third party logistics and service provider, we finally study three different inventory strategies, namely transaction-based fee, flat-based fee, and gain sharing. For each strategy, we find both channels' optimal inventory policies and expected profits. The performances of the different strategies are compared and the managerial insights are given using analytical and numerical analysis. Methodologies, insights, comparative analysis, and computational results are delivered in this dissertation for the above aforementioned problems. vii DEDICATION My earnest gratitude and respect to my honourable parents Tomader Mansoury and Hassan Radhi for their unconditional love and endless care. My purest form of love to my extraordinary wife Marwa for her everlasting support, devotion and patience. My deepest affection to my kids Feras and Kenan through whom I can have better patience, more strength and higher hope. viii ACKNOWLEDGEMENTS This Ph.D. study has enriched my knowledge in the field of Supply Chain Management. It has given me the opportunity to expand my horizon and get to know new business opportunities. For such knowledge I am truly indebted to the University of Windsor in which I was able to continue my success journey. I am deeply grateful and truly indebted to my supervisor Dr. Guoqing Zhang for his care, encouragement and patience. Dr. Zhang has stimulated excellent supporting efforts and technical knowledge that have guided me throughout this work.
International Journal of Industrial and Systems Engineering, 2013
A number of works have been dedicated to exploit dual sales channel (hereinafter, referred to as DSC), i.e. channel structure for selling a product through conventional store and online facility simultaneously. However the issue of managing sales-return for its online-transaction in this area still needs further investigation since its mismanagement may threaten the whole channel's profitability. In responding to this issue, two models describing DSC structure altogether with return mechanism is composed. The first model, namely benchmark model, is composed based on a concept of considering sales returns as lost-sales. To defy this model, an online facility return model, which represents the availability of DSC chain to substitute online customer's return for better conformity, is also constructed. By comparing considered decision variables which provide the optimum value of total or partial profit within these two models under Bertrand and Stackelberg leader schemes, some fruitful and beneficial insights for managing DSC with its return functionality are gained. Leaning on this outcome, DSC managers will have a reliable theoretical grip in determining their DSC with consideration on sales return decisions.
Article The Equilibrium Decisions in a Two-Echelon Supply Chain
2014
This article studies a supply chain composed of a manufacturer and two competing retailers. The manufacturer produces two substitutable products and offers respective service levels to customers who buy one of the two products. Each retailer can only order one kind of product from the manufacturer, and then sell them to the market at a certain sale price. The demands for two products are influenced not only by the service levels the manufacturer provides, but also the sales prices of the two products. Furthermore, we investigate the equilibrium behavior of members in the supply chain with the aid of the Stackelberg game, and discover a number of insights concerning some important parameters. Finally, Numerical analysis is presented to validate our theoretical results and compare channel performances.
Price, delivery time and retail service sensitive dual channel supply chain
Scientia Iranica, 2019
This study deals with a dual channel supply chain where the selling price of each player, delivery time for direct channel and retail service dependent demand structures are considered for manufacturer and retailer. In the direct channel, the manufacturer sells the products directly to the customers with a maximum mentioned delivery time. The delivery time of the products is adjustable according to customers' demand with an extra delivery charge. In the retail channel, the customers are extra benefited by the retail service and direct connection with the products. Selling price for the direct market is considered as lower than the retail market selling price. The behavior of the model under the integrated system is analyzed. In the decentralized structure, vertical Nash and manufacturer Stackelberg models are also discussed. The sensitivity of the key parameters is examined to test the feasibility of the model. Finally, a numerical example with graphical illustrations is provided to investigate the proposed model.
Site-to-Store or Store-to-Site? Application of One-Way Transshipment in Dual-Channel Retailing
SSRN Electronic Journal, 2000
We compare site-to-store and store-to-site strategies for dual-channel integration. The site-to-store (resp., store-to-site) strategy can …ll unmet orders in the physical channel (resp., online channel) with the inventory in the online channel (resp., physical channel). With one (physical) retail store, when only one channel should have inventory, it is the channel with stochastically larger or less uncertain demand.
A supply chain model with direct and retail channels
European Journal of Operational Research, 2008
We study a dual channel supply chain in which a manufacturer sells to a retailer as well as to consumers directly. Consumers choose the purchase channel based on price and service qualities. The manufacturer decides the price of the direct channel and the retailer decides both price and order quantity. We develop conditions under which the manufacturer and the retailer share the market in equilibrium. We show that the difference in marginal costs of the two channels plays an important role in determining the existence of dual channels in equilibrium. We also show that demand variability has a major influence on the equilibrium prices and on the manufacturer's motivation for opening a direct channel. Our numerical results show that an increase in retailer's service quality may increase the manufacturer's profit in dual channel and a larger range of consumer service sensitivity may benefit both parties in the dual channel. Our results suggest that the manufacturer is likely to be better off in the dual channel than in the single channel when the retailer's marginal cost is high and the wholesale price, consumer valuation and the demand variability are low.
A bimodal supply chain game model for apparel enterprises considering consumer channel preferences
BOHR Publishers, 2024
Considering the consumer's channel preference, this paper studies the pricing strategies of clothing manufacturers and retailers mainly selling online on traditional e-commerce platforms and live e-commerce platforms, and constructs two sales modes: direct selling mode and resale mode. Based on the Stackelberg game model, the optimal pricing and profit of direct selling mode and resale mode under centralized decision-making are solved, and the variables such as imported discount, consumer trust, and demand satisfaction are analyzed in detail. The results show that a large discount can't guarantee the maximization of platform profits and a suitable discount can effectively improve the profits of retailers and manufacturers. Traditional platform retailers effectively improve consumers' trust in goods, which is conducive to improving their own and manufacturers' profits; When the cost paid by consumers when purchasing goods from different channels is different, the change of consumers' shopping cost will directly affect the pricing of goods by the two platforms.