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Discrete Dynamics in Nature and Society
Volume 2014 (2014), Article ID 565603, 10 pages
http://dx.doi.org/10.1155/2014/565603
Research Article

Price and Service Competition of Dual-Channel Supply Chain with Consumer Returns

1School of Chemistry and Chemical Engineering, Southeast University, Nanjing 211189, China
2School of Economics and Management, Southeast University, Nanjing 210096, China

Received 26 June 2013; Accepted 21 December 2013; Published 10 February 2014

Academic Editor: Kai Huang

Copyright © 2014 Lili Ren et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Products returned by consumers are common in the retail industry and result in additional costs to both the manufacturer and the retailer. This paper proposes dual-channel supply chain models involving consumer returns policies. Also, the price and service competition between retail channel and direct channel is considered in the models. According to the models, we analyze the optimal decisions in both centralized and decentralized scenarios. Then we design a new contract, coordinate the dual-channel supply chain, and enable both the retailer and the manufacturer to be a win-win.