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Chinese Journal of Management Science ›› 2022, Vol. 30 ›› Issue (6): 116-126.doi: 10.16381/j.cnki.issn1003-207x.2019.1523

• Articles • Previous Articles    

Optimal Strategy of Dual-channel Supply Chain Considering Cross-Channel Returns

YANG Hao-xiong1, GU Zi-yue2, WANG Hao3, ZHAO Chuan1   

  1. 1. School of E-commerce and Logistics, Beijing Technology and Business University, Beijing 100048, China;2. SF Express, Beijing 101316, China;3. China Mobile Xiongan Information and Communication Technology Corporation, Beijing 100088, China
  • Received:2019-10-02 Revised:2020-03-22 Published:2022-06-24
  • Contact: 杨浩雄 E-mail:yanghaoxiong@126.com

Abstract: Cross-channel returns have appeared in the public view, and cross-channel returns services have been started to provide by some companies. For consumers who consume online, if they are not satisfied with the product, they can voluntarily return to the line within the prescribed time go to the store or go to the offline physical store to make a return. The purpose is to improve the level of after-sales service to consumers in order to increase consumer brand loyalty and thereby increase corporate profits. However, retailers will invest a certain amount of service costs, as well as the integration and communication costs of the two channels. These objective facts are the key factors that influence the retailer's decision. Therefore, a dual-channel supply chain pricing model are constructed based on the dual-channel supply chain in which retailers' online and offline sales coexist with consumers’ return. Considering the impact of different customer preferences and different return rates under centralized decision-making and decentralized decision-making, the retailer’s optimal pricing strategy is made and retailer total profit changes are found. Then the impact of changes in customer preferences and retailer returns on pricing and profit are analyzed, and the conclusion are verified by numerical examples. The results show that the optimal price setting of the retailer channel is in direct proportion to the customer’s preference for the channel, and is also in direct proportion to the return rate. When customers on a particular channel preference degree is high, the profit under decentralized decision-making is higher than centralized decision-making, and with the improvement of the channel return rate, the profit gap will further expand. To gain more benefits, decentralized decision-making channel strategy should be adopted by retailer and the competition between online as well as offline should be encouraged. And it can be seen from the simulation results that for general apparel products, retailers offering cross-channel return service have higher total profits. Cross-channel service level input will increase the revenue of retailers under certain conditions, but such input should be controlled at a reasonable level and the positive correlation between service and customer return should be maintained.

Key words: dual-channel supply chain; cross-channel returns; pricing strategy; return policy; Stackelberge game

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