Optimal pricing decisions for an omni‐channel supply chain with retail service

• DOI: 10.1111/itor.12784
• Publication Date: 2020-03-02T13:23:18Z
• Authors: Yuqing Jiang; Liping Liu; Andrew Lim
• Keywords: Stackelberg competition; Service level; Decision model

Abstract Motivated by the emergence of dominant physical stores utilizing a buy‐online‐and‐pickup‐in‐store (BOPS) channel, we examine interaction such stronger retailer and manufacturer's strategies on pricing service value. The provides an added value to end consumers traditional channel BOPS option, which has positive influence market demand. manufacturer makes selection decision between dual omni‐channel. We formulate Stackelberg game characterize equilibrium solutions under centralized decentralized cases. Our results indicate that store strongly influences players' strategies. sensitivity analysis reveals total revenue supply chain increases with scale expansion coefficient option. Furthermore, result suggests offering is always effective initiative boost performance, especially in structure.