Profitable reverse chain of any dual-channel supply chain with product quality concerns under dynamic decision support system

Abstract

Many real-life medium and large-scale organisations have shifted to online selling of products within dual-channel supply chain framework, whereas legislation favouring traditional retailers compel managers to often alter the contract mechanisms among centralised decision support systems (DSS) with revenue-sharing and linear quantity discount contract (LQDC) under decentralised DSS. Thus, the major managerial concerns include the optimal choice of DSS while ensuring consistent quality of online products under demand disruptions, a less explored area in dual-channel literature. Moreover, the backdrop of increased environmental awareness causes the emergence of APP-based third-party logistics (ATPL) enterprises, who promote mobile application based direct collection of customers' used items. However, there is a notable gap in investigating the economic independence of reverse chain partner ATPL. Thus, this study delineates one closed-loop dual-channel supply chain, the forward chain of which comprises one manufacturer selling products in both retail and online channels, and the reverse chain involves the ATPL for direct collection and the retailer for in-store collection under dynamic DSS. Results underscore the superiority of LQDC mechanism for significantly higher profitability of chain partners, including ATPL. Curtailing quality maintenance costs in both channels without compromising quality considerably improve the profitability of the proposed model.

Keywords:

• Dual-channel supply chain
• contract mechanisms under dynamic decision support system
• product quality
• APP-based third party logistics in closed-loop setup
• atomic orbital search metaheuristic

Acknowledgments

The authors are thankful to the honourable Editor-in-Chief, the respected handling editor and the esteemed reviewers for their effective advice and constructive suggestions which have improved the quality of the paper.

Data availability statement

Data availability is not applicable to the present study.

Disclosure statement

No potential conflict of interest was reported by the author(s).