Research On The Operations Decision Of Dual-channel Supply Chain Considering The Off-price Retail Market

Off-price retailer is a retailer that buys surplus inventory from a manufacturer or other retailer and then sells it to consumers at a substantial discount.With the rapid growth of off-price retailers,they are not satisfied with the leftovers at the end of the season,but want to have more seasonal new products to sell,so their purchasing method is to observe the market conditions after the beginning of the sales season.At present,there are few supply chain studies considering off-price retailers,and they all assume that the off-price retailer obtains its surplus inventory from the regular retailer.However,the reality is that off-price retailers mostly purchase products from manufacturers.Therefore,in the dualchannel supply chain considering the off-price retail market,thesis assumes that the offprice retailer obtains products from the manufacturer,and studies the optimal decisions of manufacturers,traditional retailers,and off-price retailers in the supply chain,which has certain complementary significance for the study of off-price retailers’ supply chain.Thesis constructs a dual-channel supply chain structure including one manufacturer and two retailers(regular retailer and off-price retailer).Considering the independent and correlated demand of the two retail markets,the game model of manufacturer,regular retailer and off-price retailer is constructed.The game model is analyzed and solved.Then,the numerical analysis method is used to analyze the obtained research results.Finally,the following conclusions are reached.(1)When two retailers market demand independent,if the market demand is less likely to be low,the manufacturer will encourage traditional retailers to place orders through higher unit return price,and the traditional retailers will generate more orders because of the manufacturer’s return price incentive.Only when the market demand of traditional retailers is low will they return goods.On the contrary,they will not return goods when the market demand is high.Compared with the single-channel supply chain without off-price retailers,when the possibility of low market demand is in the middle range,the manufacturer is willing to pay a larger unit return price to encourage traditional retailers to order in the dual-channel supply chain with off-price retailers than in the single-channel supply chain,and the incentivize traditional retailers will also increase their order quantity.Moreover,the optimal profit of manufacturers and traditional retailers in the dual-channel supply chain is larger than that in the single-channel supply chain.(2)When two retailers market demand correlated,if the dual consumers segment is smaller relative to the off-price retailer-only segment,the regular retailer is more likely to return the remaining inventory to the manufacturer.The optimal order volume for both regular and off-price retailers increases as the unit return price increases,as well as the off-price retailer-only segment size increases.The manufacturer’s maximum profit increases as the unit return price increases,as does the size of the off-price retailer-only segment.