Research On Pricing And Information Sharing Value In A Dual-channel Supply Chain With Production Diseconomies

Currently,more and more enterprises sell goods directly to the terminal shoppers through direct channel. Direct channel could quickly get customer orders and respond to customer demand. At the same time, these enterprises do not choose to shut down their traditional retail channels. Two kinds of marketing channels form a new supply chain mode: the dual-channel supply chain. The addition of direct channel makes the supply chain system more complex. In the dual-channel supply chain, the information asymmetry phenomenon is severe. How much information sharing value channel members could get is worthy of further discussion. In reality, the manufacturer is always a leader in dual channel supply chain. The marginal cost of production is always increasing with the volume of production increasing. Namely, the manufacturer is production diseconomies.In this research, we consider the phenomenon of production diseconomies. The dual-channel supply chain system has one manufacturer and one retailer where the manufacturer sets up a direct channel and has production diseconomies. Both players have private information about the primary demand. The optimal pricing strategy and the value of information sharing are analyzed with production diseconomies. We also explore the impact of production diseconomies on the optimal pricing strategy, the maximum expected profit and the value of information sharing. The research results indicate that as production diseconomies is larger, the wholesale prices, the price in the retail channel and direct channel of the optimal pricing strategy are higher. This phenomenon has nothing to do with information sharing. The manufacturer always benefits from sharing information. When production diseconomies is larger, information sharing becomes more valuable to the manufacturer. On the other hand, the retailer benefits from sharing information under some specific conditions. When production diseconomies is larger,information sharing become less valuable to the retailer. Finally, we use Mathematic software to do numerical analysis which proves the validity of the conclusions. We also give some management interpretations and opinions about the research results.