Pricing And Logistics Service Level Decisions In Retailer’s Dual-channel Model

Facing the big impact of E-commerce, traditional retailers who sell products through stores have suffered a lot. Many of them choose to join the on-line channel. There are two different ways for them to choose:establish their own network platform or cooperate with third-party network platform.Based on the current situation of retailers’ dual-channel research, this article studies the self-established network platform model and cooperative network platform model.The models decide optimal price and logistics service level in the two channels and get the maximal profit considering consumer valuation which is affected by sale price, logistics factors and sharing rate. Also, the article analyzes the changes about profits and quantities between traditional channel and dual-channel. At the same time, this article makes sensitivity analysis of how the logistics factors affected profits and quantities by using MATLAB R2013b software.By using literature review, questionnaire, and software analysis, the article focuses on the realistic phenomena and devoted to provide useful guide for traditional retailers who want to open dual-channel supply chain. It shows the advantages and disadvantages of the two models. Traditional retailers can find a better one that is more suitable for itself.