Equilibrium Decisions of a Dual Channel Supply Chain with the Cooperative Delivery Strategy

Abstract

The paper investigates equilibrium decisions for the dual channel large product supply chain where the manufacturer produces large products and sells it through the traditional channel and the direct sale channel applying the cooperative delivery strategy with the retailer. We take the Stackelberg game model led by the retailer to explore the optimal condition where the cooperative delivery strategy is efficient in the centralized and decentralized models. Analytical results show that the service cost structure determines the efficiency of the cooperative delivery strategy. The profitability of the retailer and manufacturer can be enhanced within the scheme of pure cooperative delivery strategy.