Scientific Programming

Scientific Programming / 2021 / Article
Special Issue

Optimization Models and Algorithms for Services and Operations Management 2021

View this Special Issue

Research Article | Open Access

Volume 2021 |Article ID 5561357 | https://doi.org/10.1155/2021/5561357

Wei Yan, Huijun Zhou, Hui Li, "Decision and Coordination of Cross-Border E-Commerce Supply Chain: Based on Four Modes of Cooperation", Scientific Programming, vol. 2021, Article ID 5561357, 15 pages, 2021. https://doi.org/10.1155/2021/5561357

Decision and Coordination of Cross-Border E-Commerce Supply Chain: Based on Four Modes of Cooperation

Academic Editor: Lu Zhen
Received06 Feb 2021
Accepted26 Apr 2021
Published07 May 2021

Abstract

Due to the explosive growth trend of cross-border e-commerce, a series of problems such as high transportation costs and insufficient publicity are to be solved urgently by researching on supply chain from both decision-making and coordination perspectives. Under the four-incomplete cooperative Stackelberg decision-making modes of cross-border e-commerce supply chain members, the transportation cost of overseas suppliers and the promotion strategy of domestic retailers determine the profit of the supply chain together and further influence the choice of the optimal decision-making plan. Furthermore, the Shapley value method and full cooperative income incremental sharing mechanism are used to redistribute the profits under different cooperation modes, and it is expected to provide scientific decision-making reference for domestic cross-border e-commerce enterprises to rationally choose cooperative relationships.

1. Introduction

With the increasing popularity of Internet technology and the improvement in payment system and the influence of new coronavirus (COVID-19), more and more consumers are buying imported goods through cross-border e-commerce platforms. Therefore, the import cross-border e-commerce shows an explosive growth trend. According to the data released by China E-Commerce Research Center (100%) EC, the transaction volume of Chinaʼs import cross-border e-commerce market in 2019 is 2.47 trillion yuan, an increase of nearly 30% over 2018, and it is expected to reach 29.66 trillion yuan in 2020.

The vigorous development of cross-border e-commerce has not only greatly enriched the product supply in the domestic market but also exposed a series of problems in the supply chain management of cross-border e-commerce in China [1]. On the one hand, the high transportation cost of cross-border e-commerce (accounting for about 20%∼30% of the total cost) not only increases the purchase cost of consumers but also reduces the profits of middlemen; on the other hand, due to the insufficient publicity of cross-border e-commerce, the single channel of commodity promotion, it is difficult for retailers to avoid the third-party e-commerce platform, which increases the intermediate links and weakens the profits of domestic cross-border e-commerce enterprises ability [2].

Therefore, in order to solve the vicious competition cycle caused by the non-cooperative game between overseas e-commerce and domestic retailers, it is urgent to study the influence of changes in transportation costs and propaganda strategy on the pricing strategy and member profit distribution of cross-border e-commerce supply chain. In this paper, we focus on the following question: first, in the decentralized and centralized scenario, how do the members in the cross-border e-commerce supply chain make decisions; second, how do the influences of transport cost and advertising cost on the decisions; finally, which can coordination mechanism effectively balance the stakeholders to make the total performance maximization.

From the existing literature, the research related to the above contents mainly focuses on the following two aspects:(1)Influence of advertising strategy on supply chain decision-makingBased on the supply chain of manufacturers and retailers, study the problems of price promotion and advertising strategy of manufacturers [3]; considering the problem that advertising investment restricts market demand, discuss the optimal decision-making and coordination mechanism under the mode of concentration and dispersion of single- and double-channel supply chain [4]; by using the consumer demand function, explore the cooperative advertising and supply chain coordination of pricing [5]; from the perspective of the dynamic influence of advertising on market demand, discuss the issues of manufacturerʼs advertisement competition and manufacturer-retailer channel price competition [6]; on the basis of the influence of innovation and advertising on the demand of commodity market, probe into the optimal decision-making of supply chain members under cooperative and non-cooperative mechanisms [7].(2)Influence of transport costs on supply chain decision-makingTo reduce transport costs and divide the cross-border e-commerce costs into management cost, logistics cost, and sale cost [8]; different supply chain logistics cost-sharing strategies are applied to explore the influence on supply chain profit through the study of the impact of tariffs, transport costs on global value chains, find that the rise of trade costs such as tariffs will increase the investment of enterprises and the purchase price of raw materials [9]; based on the game model of cross-border supply chain led by retailers, introduce the index of tariff and international transportation cost to analyze the influence of tariff change in commodity pricing and member profit of cross-border supply chain [10]; the optimized countermeasure is applied to how to use overseas warehouse to realize the timeliness of cross-border logistics in order to reduce transportation cost; consider that logistics cost has an important impact on cross-border e-commerce imports and then make a deep study on the cost optimization of cross-border e-commerce logistics [11, 12].(3)Influence of coordination contract on supply chain decision-makingThrough the supply chain contract to coordinate the decision-making behavior among the members, the profit can be optimized. Under the uncertain environment, Peng et al. [13] proposed a unidirectional option contract and bidirectional option contract to coordinate supply chain members and analyze their different impacts on members. Xu et al. [14] introduced the revenue sharing and cost sharing into designing an improved contract to coordinate the participates effectively. Designed the decision model for the nongreen and green products pricing to ensure the supply chainʼs participants achieve Pareto improvement. Dai et al. [15] designed the delivery-time-dependent quantity flexibility contract and late-rebate contract to balance the stakeholders under the uncertain demand. Liu et al. [16] discussed whether an option contract coordinated the members effectively when express delivery was provided from retailer.Through the analysis of the above literature, it is found that the research methods of supply chain are rich and mature, which provide a specific reference for this paper from the technical point of view. However, most of the research results on supply chain publicity and transportation costs are concentrated in the traditional production enterprises. There are few studies on the influence of publicity strategy and transportation cost on cross-border e-commerce pricing strategy. There is little research on the influence of supplier retailer cooperation mode on supply chain pricing at home and abroad.Based on this, from the perspective of cross-border e-commerce supply chain pricing and publicity strategies under different cooperation modes, this paper discusses the coordination of cross-border e-commerce supply chain pricing strategy and member profit distribution, as well as how cross-border e-commerce enterprises cope with the impact of changes. In terms of transportation cost and publicity level, this paper makes optimization decisions for cross-border e-commerce supply chain members to optimize cross-border e-commerce supply chain e-commerce supply chain memberʼs profit. Cross-border e-commerce supply chain provides a scientific reference for the rapid and healthy development of Chinaʼs e-commerce industry.

2. Model Hypothesis

Hypothesis 1. Domestic retailers use a variety of promotional tools to enable consumers to buy their goods, and according to [17], the demand function is not only affected by retail price but also by propaganda strategy, so suppose the demand function , in which “” for the potential market demand, “” for the retail prices per unit product of domestic retailers, “” for consumer sensitivity to retailer propaganda , and “” for the domestic retailerʼs propaganda strategy.

Hypothesis 2. According to [18], wholesale price for unit products of overseas suppliers is , and the transportation cost per unit product is a linear relationship of monotone decreasing with the volume of transport, so , in which “” is for marginal transport cost factor for unit product and “” is fixed transport costs per unit product (i.e., fixed transport costs per unit product regardless of economies of scale).

Hypothesis 3. Domestic retailers promote the extra cost of product propaganda. Assume the publicity costs of domestic retailers , in which indicates the scale of domestic retailer propaganda activity.

Hypothesis 4. If only the cost of transportation of products from overseas suppliers to domestic suppliers is considered, the cost of transportation from domestic retailers to consumers is ignored.

Hypothesis 5. Overseas suppliers and domestic retailers are completely rational persons, and the decision information of both sides is completely symmetrical.

3. Construction of Cross-Border E-Commerce Supply Chain Decision Model

In view of the space limitation, this paper mainly studies the decision-making problem under the two-level cross-border supply chain cooperation mode composed of a single overseas supplier and a single domestic retailer; that is, the overseas supplier sells the goods to the domestic retailer and bears the transportation cost. Clearly, the overseas supplier and the domestic retailer form a kind of Stackelberg cooperation relationship, and the overseas supplier is the decision-maker, while the domestic retailer is the decision follower.

By constructing decision-making models of non-cooperation, semi-cooperation (including two kinds of one-way cooperation modes of retailers sharing transportation cost and supplier sharing propaganda cost), and full cooperation between overseas suppliers and domestic retailers, it can clarify the influence of pricing and propaganda strategy on profit of cross-border e-commerce supply chain and provide scientific decision reference for rational selection of cooperative relationship.

Furthermore, the introduction of Shapley value method and the incremental benefit sharing mechanism for full cooperation is beneficial to the rational redistribution of profits of overseas suppliers and domestic retailers under different cooperation modes.

3.1. Decision-Making in the Non-Cooperative Model of Suppliers and Retailers (N)

Under this model, overseas suppliers usually set wholesale prices first, and then, domestic retailers determine retail prices and publicity strategies .

Thus, the profits of overseas suppliers and domestic retailers under the non-cooperation mode are as follows:

Proposition 1. Under the non-cooperation structure of overseas suppliers and domestic retailers, the optimal decision of cross-border e-commerce supply chain is

Proof. The reverse induction method is used to solve the problem.
Firstly, determine the Hessian matrix for the domestic retailer profit function :It is not difficult to see from the above Hessian matrix: and ; is a strictly joint concave function about and c, and there is an optimal solution to maximize profits.
Secondly, first-order partial derivative conditions are as follows: and substituted into formula (1), and the second-order derivative function of profit function of overseas suppliers can be obtained as .
It can be seen that is a strict concave function about , and there is an optimal solution to maximize profit, and thus, the first-order partial derivative condition is ; decisions available to domestic retailers are and . Now, the commodity market demand and the profits of the members of the cross-border e-commerce supply chain areFrom the above equilibrium results, we can see that the pricing of cross-border e-commerce supply chain is inversely proportional to the unit transportation cost, while the propaganda strategy of domestic retailers and the profits of supply chain members are all proportional to the unit transportation cost; that is, , , , , .

3.2. Decision-Making under the One-Way Cooperation Mode for Retailers Sharing Suppliersʼ Transportation Costs (M)

Based on their own profit maximization under this mode, domestic retailers will share the transportation costs of overseas suppliers in proportion of .

Obviously, when , domestic retailers are unwilling to share the transportation costs of overseas suppliers, and when , domestic retailers are willing to share the full transportation costs of overseas suppliers.

Under established , overseas suppliers usually set wholesale prices , and then, domestic retailers determine retail price and publicity strategy .

Therefore, the profits of overseas suppliers and domestic retailers under this cooperation model are

Proposition 2. Under the one-way cooperation mode of domestic retailers sharing the transportation cost of overseas suppliers, the optimal decision of cross-border e-commerce supply chain is as follows:

Proof. The reverse induction method is used to solve the problem.
Firstly, determine Hessian matrix for the domestic retailer profit function :It is not difficult to see from the above Hessian matrix: and ; is a strictly joint concave function about and , and there is an optimal solution to maximize profits.
Secondly, first-order partial derivative conditions are as follows: and substituted into formula (2), and the second-order derivative function of profit function of overseas suppliers can be obtained as .
It can be seen that is a strict concave function about , and there is an optimal solution to maximize profit; thus, the first-order partial derivative condition is , and decisions available to domestic retailers are and . The profits of domestic retailers are .
Moreover, according to , is a strict concave function about , which has the optimal solution to maximize the profit of domestic retailers, so substituting the first-order partial derivative condition into formula , , and , the optimal decisions of overseas suppliers and domestic retailers are , , and .
Finally, it can be concluded that the market demand of commodities and the profits of each member of cross-border e-commerce supply chain are as follows:It can be seen that, in the semi-cooperative mode of retailers sharing the transportation costs with suppliers, domestic retailers are generally willing to share the total transportation costs of overseas suppliers in order to maximize their profits. Also, the cost of transportation will eventually be passed on to consumers by domestic retailers.

3.3. Decision-Making under the One-Way Cooperation Model for Suppliers Sharing Retailersʼ Publicity Costs (R)

Based on their own profit maximization under this mode, most of the overseas suppliers in this model will share the publicity cost with domestic retailers in proportion of .

Obviously, when , overseas suppliers are unwilling to share the promotional costs of domestic retailers; when , overseas suppliers are willing to share the full promotional costs of domestic retailers. Under established condition , overseas suppliers usually set wholesale prices first, and then, domestic retailers determine retail prices and publicity strategies .

Therefore, the profits of overseas suppliers and domestic retailers under this cooperation model are

Proposition 3. Under the one-way cooperation mode of overseas suppliers sharing the propaganda cost of domestic retailers, the optimal decision of cross-border e-commerce supply chain is as follows:

Proof. Proof. The reverse induction method is used to solve the problem.
Firstly, determine the Hessian matrix for the domestic retailer profit function:It is not difficult to see from the above Hessian matrix, and ; is a strictly joint concave function about and , and there is an optimal solution to maximize profits; thus, the first-order partial derivation condition is and . Substituting and into formula (2), the second-order derivative function of profit function of overseas suppliers can be obtained. When , .
It can be seen that is the strict concave function about , and there is an optimal solution to maximize profits. Therefore, the first-order partial derivative condition is , decisions of domestic retailers are and , and profits from overseas suppliers at this time are .
According to , is the strict concave function about , and there is an optimal solution to maximize the profits of overseas suppliers, so the first-order partial derivative condition is .
Substituting into formula , , and , respectively, optimal decision-making available for overseas suppliers and domestic retailers can be obtained as , , and .
Finally, the market demand for commodities and the profits of members of cross-border e-commerce supply chains areIn the semi-cooperative mode of supplier sharing retailerʼs propaganda cost, foreign suppliers are mostly willing to share 1/3 propaganda cost of domestic retailers in order to maximize their profits.

3.4. Decision-Making under the Two-Way Cooperation Mode in Which Retailers Share Transportation Costs and Suppliers Share Publicity Costs (MR)

The domestic retailers in this mode share the transportation costs of overseas suppliers in proportion of based on their own profit maximization considerations, and the overseas suppliers share the propaganda costs of domestic retailers in proportion of based on their own profit maximization considerations.

Under established condition and , overseas suppliers will first determine wholesale prices, and then, domestic retailers determine retail prices and publicity strategies .

Under this condition, the profit of overseas suppliers and domestic retailers under the cooperation mode is

Proposition 4. Under the two-way cooperation mode between overseas suppliers and domestic retailers, the optimal decision of cross-border e-commerce supply chain is

Proof. The reverse induction method is used to solve the problem.
Firstly, determine the Hessian matrix for the domestic retailer profit function:It is not difficult to see from the above Hessian matrix: and . Thus, is a strictly joint concave function about and , and there is an optimal solution to maximize profits.
Secondly, first-order partial derivation conditions are as follows:Substituting and into formula (7), the second-order derivative of the profit function of overseas suppliers can be obtained.
When ,It can be seen that is the strict concave function about , and there is an optimal solution to maximize profits. Therefore, the first-order partial derivative condition is , so decision-making by domestic retailers is and .
At this point, the profits of the cross-border e-commerce supply chain areAccording to and , the optimal proportion of overseas suppliers and domestic retailers sharing each otherʼs corresponding costs, under this cooperation mode, is .
Substituting and into , , and , respectively, optimal decisions for overseas suppliers and domestic retailers can be obtained as , , and .
Finally, it can be determined that the commodity market demand and the profits of the members of the cross-border e-commerce supply chain are as follows:Under the two-way cooperation mode between overseas suppliers and domestic retailers, retailers are no longer willing to share the total transportation costs of suppliers, but suppliers are still willing to share one-third of the promotional costs of retailers.

4. Comparative Analysis

Proposition 5. Under the specific unit transportation cost, the pricing decisions of different cooperation modes satisfy the following:

Proof. According to the above proposition, comparing the optimal solutions under the four different cooperation modes, the following relationships can be found:It is found from Proposition 5 that, when overseas suppliers share part of the publicity costs of domestic retailers, the premise of raising or lowering wholesale prices is that domestic retailers are willing to share all or part of their transportation costs. Also, the retail price ranking of domestic retailers is consistent with the wholesale price ranking of overseas suppliers. More importantly, in the pricing decision of cross-border e-commerce supply chain, the cost of upstream enterprises will be transferred directly to downstream enterprises and eventually apportioned to each consumer.

Proposition 6. Under the specific unit transportation cost, the propaganda strategy of different cooperation modes satisfies the following:
When , .
When , .

Proof. According to the above proposition, comparing the optimal solutions under the four different cooperation modes, the following relationships can be found:When , i.e., .
When , , i.e., ; , and .
It is found from Proposition 6 that the two-way cooperation mode between overseas suppliers and domestic retailers can most effectively enhance the product publicity strategy of domestic retailers. However, for the two one-way cooperation modes, with the increase in unit transportation cost, the initial one-way cooperation of the supplier sharing the retailerʼs propaganda cost will become the one-way cooperation of the retailer sharing the supplierʼs transportation cost.

Proposition 7. Under the specific unit transportation cost, the profits of cross-border e-commerce supply chain members of different cooperation modes satisfy, respectively, the following:

Proof. According to the above proposition, comparing the profits of cross-border e-commerce supply chain members under four different cooperation modes, we can get the following relationship:It is found from Proposition 7 that both overseas suppliers and domestic retailers will choose the one-way cooperation mode of retailers sharing the transportation costs of suppliers and the two-way cooperation mode to improve their profits, and the former is more effective than the latter.

5. Coordination Analysis

In cross-border e-commerce, even if overseas suppliers and domestic retailers choose the decision-making mode of semi-cooperation (between non-cooperation and full cooperation), the two parties will still keep some room for profit. Therefore, it is necessary to introduce the Shapley value method and full cooperative decision profit incremental sharing mechanism to coordinate non-cooperation and the three semi-cooperation modes, but before that, it is necessary to analyze the problem of full cooperative decision-making between suppliers and retailers.

5.1. Coordination of the Full Cooperation Mode between Overseas Suppliers and Domestic Retailer (C)

In the mode of full cooperation, the members of the supply chain of cross-border e-commerce pay great attention to the maximization of the overall benefit, so they generally make joint decisions on the retail price and propaganda strategy of the goods at the same time.

Therefore, the profit of cross-border e-commerce supply chain under the mode of full cooperation is as follows:

Proposition 8. Under the mode of full cooperation between overseas suppliers and domestic retailers, the optimal decision of cross-border e-commerce supply chain is

Proof. Solved by reverse induction.
Firstly, determine Hessian matrix of for the domestic retailer profit function:It is not difficult to see from the above Hessian matrix: when , and . Thus, is a strictly joint concave function about and , and there is an optimal solution to maximize profits. So the first-order partial derivation conditions are as follows: and , and the market demand for commodities and the profits of cross-border e-commerce supply chain can be determined as

5.2. Shapley Value Method Coordination (S)

Shapley value method is a method of fair distribution of cooperative income based on the marginal contribution of individuals to the whole.

For the non-cooperation mode and 3 semi-cooperation modes between overseas suppliers and domestic retailers, the Shapley value method is used to distribute the overall supply chain profits when the two fully cooperate, and the profits distributed by both sides under different cooperation modes can be obtained:(1)Non-cooperative coordination between overseas suppliers and domestic retailers (SN)At this point,(2)One-way cooperative coordination of domestic retailers sharing transportation costs for overseas suppliers (SM)At this point,(3)One-way cooperative coordination of domestic retailers sharing publicity costs for overseas suppliers (SR)At this point,(4)Two-way cooperative coordination of domestic retailers sharing transportation costs of overseas suppliers and overseas suppliers sharing promotional costs of domestic retailers (SMR)At this point,

5.3. Benefit-Sharing Coordination for Full Cooperation Decision-Making between Suppliers and Retailers (V)

The profit increment mechanism of the shared system is based on the profit increment of the whole supply chain under the decision of full cooperation, compared with that under the decision of non-cooperation or semi-cooperation. The system income increment is distributed to each member according to the proportion of the supply chain memberʼs input.

Therefore, the input of overseas suppliers and domestic retailers is as follows, respectively:

5.3.1. Non-Cooperative Coordination between Suppliers and Retailers (VN)

Under this structure, the income increment of supply chain is as follows:

Substituting the aforementioned values of into (47) and (48), the proportion of input from overseas suppliers and domestic retailers to the total input of the supply chain is

Thus, the profits of overseas suppliers and domestic retailers after coordination are

5.3.2. Coordination of One-Way Cooperation of Retailers Sharing Suppliers’ Transport Costs (VM)

In this mode, the income increment of supply chain system is as follows:

Substituting formulas (12) and (13) into (47) and (48), the proportion of input from overseas suppliers and domestic retailers to the total input of the supply chain is

Thus, the profits of overseas suppliers and domestic retailers after coordination are as follows:

5.3.3. Coordination of One-Way Cooperation of Suppliers Sharing Retailers’ Publicity Costs (VR)

In this mode, the income increment of supply chain system is

Substituting formulas (19) and (20) into (47) and (48), the proportion of input from overseas suppliers and domestic retailers to the total input of the supply chain is

Thus, the profits of overseas suppliers and domestic retailers after coordination are

5.3.4. Coordination of Two-Way Cooperation of Retailers Sharing Suppliers’ Transport Costs and Suppliers Sharing Retailersʼ Publicity Costs (VMR)

In this mode, the income increment of supply chain system is

Substituting formulas (27) and (28) into (47) and (49), the proportion of input from overseas suppliers and domestic retailers to the total input of the supply chain is

Thus, the profits of overseas suppliers and domestic retailers after coordination are

6. Example Analysis

In order to further analyze and compare the rationality and effectiveness of decision-making in different cooperation modes, this paper verifies the above proposition by example analysis. Based on the investigated data, the relevant parameters can be set as the scale of domestic retailersʼ publicity activities , potential market demand , fixed transportation costs per unit product , and the sensitivity of consumers to retailersʼ publicity . The value range of marginal transportation cost factor per unit product can be limited to range .

Substituting the above parameters into the profit algebraic formula of supply chain members of Propositions 14 and the corresponding algebraic formula after coordination, as increases gradually in the range of values, the profits of the members of cross-border e-commerce will change accordingly. In order to observe the law of concrete change, the results of operations in different cooperative modes can be mapped to graphs to analyze the coordinating effect of the two coordination mechanisms, as shown in Figures 14.

It can be seen from Figures 14 that, under different cooperation modes, the Shapley value method and full cooperation revenue increment sharing coordination mechanism can improve the profits of overseas suppliers and domestic retailers. Firstly, overseas suppliers under different cooperation modes are more willing to choose the Shapley value method for profit redistribution, while domestic retailers are more willing to choose the full cooperation incremental revenue sharing mechanism for profit redistribution; secondly, the larger the unit transportation cost is, the more obvious the profit redistribution is; the impact of these two coordination mechanisms on the profits of cross-border e-commerce supply chain members will be different; Finally, under the two semi-cooperation modes of domestic retailers participating in the sharing of transportation costs of overseas suppliers, the profit coordination effect of full cooperation benefits is increasing, which is generally not important for the sharing mechanism of overseas suppliers. Taking different coordination mechanisms as units, the results can be drawn into tables to analyze the changing trend of profit under different cooperation modes before and after coordination, as shown in Tables 1 and 2.