Return Decision Model of the Manufacturer-Leading Dual-Channel Supply Chain

Abstract

According to the manufacturer-leading dual-channel supply chain return problem, a linear demand function considering the change rate of product interaction between the two channels and the change rate of market demand on the return price was established. Under the premise of no cross-return, this paper analyzes the changes of the optimal profit value of the manufacturer, retailer, and supply chain of the dual-channel supply chain in the context of centralized and decentralized decision-making and through the establishment of the price discount decision model and compensation strategy to coordinate the whole supply chain profit. This paper has shown that the use of the price discount decision model and compensation policy model could make the whole supply chain profit optimum value in decentralized decision-making situations equal to profit optimum value in the centralized decision-making situations, and price discount model could make manufacturers better to maximize profit considering the same return scenario, and that compensation policy model could be more helpful to maximize profits for retailers.