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ABSTRACT
We consider a decentralized supply chain that a manufacturer wholesales a product to a retailer who sells the product on a price-and-time dependent market with a two-stage strategy over the selling period, including a retail store in the first stage and a retail store and an online store in the second stage. We assume the manufacturer follows a producing curve to manufacture the product and set the two stages’ wholesale prices. Demand leakage from the retail store to the online store is considered. Our supply chain is developed to explore how a volatile online market will impact the chain’s performances. Numerical examples are conducted to identify the double marginalization effect that both members will never agree on the same timing to practice the second stage, which seriously undermines the manufacturer’s profit; especially in a high price- or time-sensitive online market.
Disclosure statement
No potential conflict of interest was reported by the authors.
Additional information
Notes on contributors
Kuo-Hsien Wang
Kuo-Hsien Wang is an assistant professor in the Department of Business Administration, Takming University of Sciences and Technology, Taipei, Taiwan. His research areas include inventory management, EOQ and numerical analysis.
Yuan-Chih Huang
Yuan-Chih Huang is an assistant professor in the Department of Business Administration, Takming University of Sciences and Technology, Taipei, Taiwan. His research areas include inventory management and marketing.
Che-Tsung Tung
Che-Tsung Tung is currently the chairman of the Department of International Trade, Takming University of Sciences and Technology, Taipei, Taiwan. His study activities include inventory management, statistic and numerical analysis.