# American Institute of Mathematical Sciences

July  2016, 12(3): 991-1007. doi: 10.3934/jimo.2016.12.991

## Store assistance and coordination of supply chains facing consumer's return

 1 School of Management Science and Engineering, Nanjing University, Hankou Road 22, Nanjing, Jiangsu 210093

Received  August 2014 Revised  February 2015 Published  September 2015

In this paper, we develop two game theoretic models of a one-manufacturer and one-retailer supply chain to study the store assistance service decision and channel coordination mechanism, where the retailer allows consumers to return mismatching product and invests on store assistance service to reduce mismatching rate. Under manufacturer Stackelberg model, we find that the players' profits increase with mismatching rate and mismatching cost if market scale is sufficiently large. We design a quantity discount-subsidy contract to coordinate the pricing and service investment behavior of the retailer and find that the coordinated unit wholesale price increases with mismatching cost and mismatching rate if both subsidy fee and service cost are sufficiently high. By comparing with the retailer Stackelberg model, we find that (i) there exists a first-mover advantage; (ii) the unit wholesale price under retailer Stackelberg is lower than that under manufacturer Stackelberg while the retail price and service level under retailer Stackelberg is higher; and (iii) the retailer's channel leadership raises product quantity if the probability of high mismatching loss is sufficiently low. We design a two-part margin-subsidy rate mechanism to coordinate the retailer Stackelberg supply chain.
Citation: Jing Shi, Tiaojun Xiao. Store assistance and coordination of supply chains facing consumer's return. Journal of Industrial & Management Optimization, 2016, 12 (3) : 991-1007. doi: 10.3934/jimo.2016.12.991
##### References:

show all references

##### References:
 [1] Juliang Zhang, Jian Chen. Information sharing in a make-to-stock supply chain. Journal of Industrial & Management Optimization, 2014, 10 (4) : 1169-1189. doi: 10.3934/jimo.2014.10.1169 [2] David Cantala, Juan Sebastián Pereyra. Endogenous budget constraints in the assignment game. Journal of Dynamics & Games, 2015, 2 (3&4) : 207-225. doi: 10.3934/jdg.2015002 [3] Guillaume Bal, Wenjia Jing. Homogenization and corrector theory for linear transport in random media. Discrete & Continuous Dynamical Systems - A, 2010, 28 (4) : 1311-1343. doi: 10.3934/dcds.2010.28.1311 [4] W. Cary Huffman. On the theory of $\mathbb{F}_q$-linear $\mathbb{F}_{q^t}$-codes. Advances in Mathematics of Communications, 2013, 7 (3) : 349-378. doi: 10.3934/amc.2013.7.349 [5] Wen-Bin Yang, Yan-Ling Li, Jianhua Wu, Hai-Xia Li. Dynamics of a food chain model with ratio-dependent and modified Leslie-Gower functional responses. Discrete & Continuous Dynamical Systems - B, 2015, 20 (7) : 2269-2290. doi: 10.3934/dcdsb.2015.20.2269

2019 Impact Factor: 1.366