Return Strategy In Dual-Channel Supply Chain

Both dual-channel supply chain and money back guarantee strategy are commonly used commercial methods for firms in the process of operations and marketing,and is paid extensive attention to by scholars and practitioners.For dual-channel supply chain,it can help firms better cover different consumer segments.While for money back guarantee strategy,it helps firms increase consumer utility,and thus increase demand,without lowering down price.However,with the rapid development of e-commerce,consumer shopping mode changes,as well as the impact of the national return policy,numerous emerging issues in the areas of dual-channel and money back guarantee strategy are calling to be resolved.Thus,considering that most firms distribute their products through specific distribution channels,it is quite necessary for us to analyze the emerging issues of dual-channel and money back guarantee strategy under different channel structures.The purpose of this thesis is to make a deep theoretical analysis and methodological esearch on the combination of two-level supply chain composed of manufacturer,retailer and consumer with money back guarantee strategy.A series of esearch works are conducted as follows.First,the problem of combining a two-level supply chain consisting of manufacturer,retailer and consumers with money back guarantee strategy is described.,and the corresponding theoretical framework for the research problem is proposed.In order to making the research system clear,the research problem is classified into three categories according to the basic operational modes of the dual-channel supply chain,i.e,the research on money back guarantee strategy of price decision,the research on money back guarantee strategy of order quantity decision,the research on money back guarantee strategy of product quality and service level decision.The three problems are described,respectively.And the corresponding theoretical frameworks for the three research problems are proposed,respectively.These basic research works mentioned above make the study of three problems addressed in this thesis to be theoretically systemic.They provide a theoretical guidance framework and analytical framework to the related problems.Second,the study on the price decision of a dua-channel supply chain with money back guarantee is conducted.Specifically,it mainly includes the following aspect:The study on the price decision of a dual-channel supply chain with with money back guarantee is conducted.By constructing three supply chain models,this paper studies the seller’s price decision,and analyses the influence of different money back guarantee strategies and situations on the equilibrium results and the threshold of manufacturer’s opening direct channels.The results show that with the traditional single-channel retail channel,offering money back guarantee can improve the demand,manufacturer’s profit,retailer’s profit and consumer’s surplus,although increases the retail price.When the channel cost difference is high,the manufacturer will not open direct channel.Whether it is model Na or model RS offering money back guarantee is beneficial for manufacturer to open direct channel.Compared with dual-channel that do not offers money back guarantee,both channels offers money back guarantee,which is not conducive to improve the retailer’s profit,but is beneficial to improve manufacturer’s profit,total profit and consumer’s surplus.In the dualchannel supply chain: when retail satisfaction is low,the centralized company will choose both channels to offfer a money back guarantee strategy.When retail satisfaction is high,the manufacturer and retailer’s money-back guarantee strategy is BG.,when the retail satisfaction is low,the manufacturer and retailer’s money-back guarantee strategy is DG.Third,the study on the quantity decision of a dual-channel supply chain with money back guarantee is conducted.Specifically,it mainly includes the following aspect:The study on the quantity decision of a dual-channel supply chain with with money back guarantee is conducted.By constructing two supply chain models,this paper studies the seller’s quantity decision problem.The effects of money back guarantee and quantity decision sequence on equilibrium results,threshold of opening direct channel are analyzed.With comparison and analysis,it is found that in the traditional retail channel supply chain,offering money back guarantee that enhance sales volume,manufacturer’s profit,and consumer’s surplus.Manufacturer will not open direct channel when it’s selling cost is high.Manufacturer can more easily open a direct channel by offering money back guarantee.In the dual-channel supply chain,offering money back guarantee reduces retailer’s profit,increases direct sales volume,total sales volume,manufacturer’s profit and consumer’s surplus.Direct sales volume,total sales volume and consumer’s surplus decrease with direct selling cost of manufacturer,while manufacturer’s profit decreases first and then increases with direct selling cost.When retail satisfaction and direct selling costs are not both high,offering money back guarantee is profitable for the manufacturer.Fourth,the study on the product quality and service level decision of a dua-channel supply chain with money back guarantee is conducted.Specifically,it mainly includes the following two aspects:On the one hand,when consumers return goods due to non-quality defects.In the dualchannel supply chain,we consider four possible strategies to study the effects of four money back guarantee strategies on product quality and service level.The study found that only the direct channel supply,only the retail channel and the two channels are offering money back guarantee are help manufacturer improve the product quality level compared with the two channels are not offering money back guarantee.Only the retail channel and the two channels are offering money back guarantee are help retailer improve the service level compared with only the direct channel and the two channels are not offering money back guarantee.If the return rate is less than a threshold,when the return value is low,the equilibrium strategy of the manufacturer and the retailer is BN,when the return value is moderate,the equilibrium strategy of the manufacturer and the retailer is DG;when the return value is high,the equilibrium strategy of the manufacturer and the retailer is BG.On the other hand,when consumers return goods due to quality defects,the optimalquality and service of three supply chain models were explored by using two-stageoptimization method.In the traditional single retail channel,we show that the optimalproduct quality and retail services of MS,RS and VN supply chain models are the same,soare the demand,consumer surplus and profits.When the residual value meets certainconditions in three supply chain models,money back guarantee will help to improve productquality,product demand,as well as consumer surplus,and reduce the rate of product return.When the residual value meets certain conditions,for MS and RS supply chain models,money back guarantee will help to improve retail service.For VN supply chain model,money back guarantee is always not conducive to improving services.In the dual-channel,we consider four possible strategies.The results show thatcompared with strategy BN,DG,RG and BG all help manufacturer improve productquality,the product quality is highest in strategy DG.Compared with strategy BN and DG,strategies RG and BG can help retailer improve service level,the service level is highest instrategy BG.When the net value of products is lower than a threshold,the equilibriumstrategy of both the manufacturer and the retailer is DG;when the net value of products ishigher than a threshold,the equilibrium strategy of both the manufacturer and the retailer isBG.The study of dual-channel supply chain with with money back guarantee is conducted.By constructing a two-level supply chain model consisting of one manufacturer,one retailerand consumers,the results of this paper are used to analyze supply chain the price decision,order quantity decision,product quality decision,service level decision,the threshold for opening direct channel,and.equilibrium money back guarantee strategy for supply chain members.The research work in this thesis provides a theoretical guidance framework and methodical and technical framework to solve the dual-channel supply chain with money back guarantee,and also lays a solid foundation to the extension and application of the related study.