Joint Optimal Decisions on Pricing and Local Advertising Policy of a Socially Responsible Dual-Channel Supply Chain

SYNOPTIC ABSTRACT

This article investigates a socially responsible dual channel supply chain model with local advertising, where the socially concerned manufacturer employs a direct channel and a retail channel to vend the product to their customers. The manufacturer has incorporated corporate social responsibility by accounting the consumer surplus in his total profit function. We analyze the performance of channel under manufacturer Stackelberg, retailer Stackelberg, and Nash model configurations from the perspective of a socially responsible manufacturer. In addition, we also discuss the supply chain coordination via local promotional cost and a revenue sharing contract.

KEY WORDS AND PHRASES:

• Dual-channel
• corporate social responsibility
• advertising
• Stackleberg game
• revenue sharing