Operational Decisions of Online Dual-channel Supply Chain Considering Products Quality Difference under Different Financing Modes

Abstract

This paper examines the optimal decisions on operations and financing modes of a capital-constrained manufacturer selling two different quality levels of products through an online dual-channel. The manufacturer can mitigate financial constrains by leveraging either e-commerce platform financing or bank financing.The Stackelberg game models are established under both financing modes to analyze the optimal decisions of the manufacturer and the e-commerce platform. Additionally, the study explores the effects of financing interest rates and product quality differences on equilibrium outcomes in the online dual-channel. The findings reveal the following: (i) As financing interest rates increase, total product sales decline. While product prices may rise, this does not necessarily intensify price competition within the online dual-channel. (ii) When the e-commerce platform’s financing rate exceeds the bank rate, the manufacturer sets higher direct sales prices. Beyond a specific threshold, distribution prices rise, and total sales decrease. (iii) When consumers are indifferent to the two online channels, the manufacturer will distribute high-quality products under both financing modes at high interest rates, more lenient condition under e-commerce financing. (iv) When the financing interest rates of the e-commerce platform and the bank are the same, the manufacturer prefers e-commerce financing for distributing high-quality products, but opts for bank financing when directly selling high-quality products with a significant quality gap.

Keywords

Different financing modes / quality difference / online dual-channel supply chain / operational decisions

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Systems Engineering Society of China and Springer-Verlag GmbH Germany

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