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doi: 10.3934/jimo.2022069
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## Optimal distribution strategy and online channel mode by considering retailer's fairness concerns

 School of Business, Fuyang Normal University, Anhui Provincial Key Laboratory, Regional Logistics Planning and Modern Logistics Engineering, Fuyang Normal University, Fuyang, Anhui 236037, China

*Corresponding author: Wei Shi

Received  July 2021 Revised  February 2022 Early access April 2022

In supply chain systems, when retailers have fairness concerns behavior, how to choose distribution strategy and online channel mode is significant to improve the operation efficiency of the supply chain systems. A game theory is used to model the competitive relationship between a manufacturer and a retailer or an E-commerce platform in a dual-channel supply chain. The manufacturer can sell high-quality or low-quality products through online or offline channel. The manufacturer can directly sell products to consumers by himself or the E-commerce platform through the online channel. The manufacturer also can wholesale products to retailers and then retailers sell products to consumers through the online channel. Combining the two distribution strategies and three online channel modes, six dynamic models are constructed to analyze the effect of retailer's vertical and horizontal fairness concerns on the decisions of supply chain members. The results show that: the manufacturer direct selling mode and distribution strategy of selling high-quality or low-quality products through offline or online channel is better for the manufacturer and supply chain system under most conditions, which will damage the retailer's benefit. The retailer's fairness concerns do not affect the pricing strategy and consumer demands, and they do not necessarily bring more benefits to the retailer. When the E-commerce platform sets an appropriate commission fee, the agency selling mode is the best choice for supply chain members.

Citation: Xuemei Zhang, Chenhao Ma, Jiawei Hu, Wei Shi. Optimal distribution strategy and online channel mode by considering retailer's fairness concerns. Journal of Industrial and Management Optimization, doi: 10.3934/jimo.2022069
##### References:

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##### References:
Structure of six models in a dual-channel supply chain
Impact of $\lambda$ and $\gamma$ on M's profit
Impact of $\lambda$ and $\gamma$ on R's utility
Impact of $\lambda$ and $\gamma$ on supply chain's profit
Impact of $k$ on M's profit
Impact of $k$ on R's utility
Impact of $\lambda$ and $\gamma$ on supply chain's profit
Symbols and notations
 Notations Definition $i$ Model $i$, $i\in\{MHL, MLH, RHL, RLH, AHL, ALH\}$ $n$ Product $n$, $n\in\{H, L\}$ $j$ Supply chain member $j$, $j\in\{M, R, E\}$ $Q$ Basic market demand $\alpha$ Product quality elasticity coefficient $q$ Quality level of high-quality products $\theta$ Degree of quality differentiation between two products $k$ Unit commission fee $\lambda$ Vertical fairness concern coefficient $\gamma$ Horizontal fairness concern coefficient $w_{n}^{i}$ Unit wholesale price of product $n$ in model $i$ $p_{n}^{i}$ Unit retail price of product $n$ in model $i$ $D_{n}^{i}$ Demand of product $n$ in model $i$ $\pi_{j}^{i}$ Profit of supply chain member $j$ in model $i$ $U_{R}^{i}$ R's utility in model $i$
 Notations Definition $i$ Model $i$, $i\in\{MHL, MLH, RHL, RLH, AHL, ALH\}$ $n$ Product $n$, $n\in\{H, L\}$ $j$ Supply chain member $j$, $j\in\{M, R, E\}$ $Q$ Basic market demand $\alpha$ Product quality elasticity coefficient $q$ Quality level of high-quality products $\theta$ Degree of quality differentiation between two products $k$ Unit commission fee $\lambda$ Vertical fairness concern coefficient $\gamma$ Horizontal fairness concern coefficient $w_{n}^{i}$ Unit wholesale price of product $n$ in model $i$ $p_{n}^{i}$ Unit retail price of product $n$ in model $i$ $D_{n}^{i}$ Demand of product $n$ in model $i$ $\pi_{j}^{i}$ Profit of supply chain member $j$ in model $i$ $U_{R}^{i}$ R's utility in model $i$
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