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Product quality control strategy of dual distribution channel structure in three-echelon supply chain

  • Soft computing in decision making and in modeling in economics
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Abstract

Based on the three-stage Stackelberg dynamic game model, we study how to make product quality control strategy in the three-echelon supply chain consisting of the manufacturer, retailer and customer under retailer dual-channel structure and manufacturer dual-channel structure. In two decision models (decentralized decision, centralized decision), we analyze the demand price elasticity, market share ratio, revenue sharing ratio and quality cost coefficient how to influence the product demand, product quality level, retail price and direct price in different channels, expected revenue functions of manufacturer and retailer, consumer surplus and product quality control strategy. We find that firstly, the retail price and direct price are positively related to product quality level, and the product quality level is negatively related to the demand price elasticity in traditional retail channel and the demand price elasticity in internet channel. What's more, the retailer’s retail price in traditional retail channel will be higher than direct price in internet channel. Thirdly, in the case of centralized decision, the manufacturer's product quality level, retail price, joint expected revenue and consumer surplus will all rise, but the direct price will fall. Fourthly, when the manufacturer entrusts the third-party platform to build the internet channel, the manufacturer's product quality level, retail price, direct price, expected revenue, and consumer surplus will all decrease. Finally, we conduct the simulation analysis by MATLAB 2018, which verifies the validity and credibility of our conclusions and points the direction for the specific application of the model in practice.

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Acknowledgements

The authors are grateful to the referees for their valuable comments and their helps on how to improve the quality of our paper. This work was supported by the National Social Science Fund of China under grant No. 20BGL272 and No.21ZDA024, and the Nature Science Foundation of Shandong Province under grant No. ZR2019MG017.

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Authors and Affiliations

  1. School of Business, Shandong Normal University, Ji’nan, 250014, China

    Lilong Zhu & Bingjie Lu

  2. Quality Research Center, Shandong Normal University, Ji’nan, 250014, China

    Lilong Zhu & Bingjie Lu

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  1. Lilong Zhu
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  2. Bingjie Lu
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Correspondence to Lilong Zhu.

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Zhu, L., Lu, B. Product quality control strategy of dual distribution channel structure in three-echelon supply chain. Soft Comput 26, 829–840 (2022). https://doi.org/10.1007/s00500-021-06406-9

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  • DOI: https://doi.org/10.1007/s00500-021-06406-9

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