This study investigates product rollover and direct sales decisions in a supply chain with one fashion manufacturer and one retailer when two style generations are sequentially introduced to the market over two periods. The retailer serves as the exclusive sales channel during the introductory period of a style generation. Both the retailer and manufacturer are capable of selling the old style generation in the second period. The retailer adopts dual rollover if she sells the old style generation, and single rollover if she does not. We develop a two-stage game to explore the chain members’ equilibrium decisions while accounting for the manufacturer’s cost inefficiency in direct sales and consumers’ mental account deficit. We find that the manufacturer’s cost inefficiency has double-edged effects and can offset the negative effect of consumers’ mental account deficit on the introduction of a new style generation. Furthermore, a win–win outcome can be achieved when the manufacturer with an intermediate level of cost inefficiency engages in direct sales and consumers have high valuations of the old style generation or when the manufacturer with significant cost inefficiency does not engage in direct sales.
Keywords: Supply chain, product rollover, fashion product, mental account deficit, manufacturer encroachment
@article{RO_2022__56_4_2203_0,
author = {Hsieh, Chung-Chi and Putera, Rizki Revianto},
title = {Product rollover and direct sales decisions in dual-channel supply chains},
journal = {RAIRO. Operations Research},
pages = {2203--2220},
year = {2022},
publisher = {EDP-Sciences},
volume = {56},
number = {4},
doi = {10.1051/ro/2022104},
mrnumber = {4456296},
zbl = {1497.90036},
language = {en},
url = {https://www.numdam.org/articles/10.1051/ro/2022104/}
}
TY - JOUR AU - Hsieh, Chung-Chi AU - Putera, Rizki Revianto TI - Product rollover and direct sales decisions in dual-channel supply chains JO - RAIRO. Operations Research PY - 2022 SP - 2203 EP - 2220 VL - 56 IS - 4 PB - EDP-Sciences UR - https://www.numdam.org/articles/10.1051/ro/2022104/ DO - 10.1051/ro/2022104 LA - en ID - RO_2022__56_4_2203_0 ER -
%0 Journal Article %A Hsieh, Chung-Chi %A Putera, Rizki Revianto %T Product rollover and direct sales decisions in dual-channel supply chains %J RAIRO. Operations Research %D 2022 %P 2203-2220 %V 56 %N 4 %I EDP-Sciences %U https://www.numdam.org/articles/10.1051/ro/2022104/ %R 10.1051/ro/2022104 %G en %F RO_2022__56_4_2203_0
Hsieh, Chung-Chi; Putera, Rizki Revianto. Product rollover and direct sales decisions in dual-channel supply chains. RAIRO. Operations Research, Tome 56 (2022) no. 4, pp. 2203-2220. doi: 10.1051/ro/2022104
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