Dynamic cooperative advertising strategy in OAO supply chain with customer return
RAIRO - Operations Research - Recherche Opérationnelle, Tome 54 (2020) no. 5, pp. 1537-1553.

Nowadays many manufacturers are increasingly adopting their own online direct channel and the offline retail channel to sell their products as the quick development of e-commerce and third party logistics. To gain more and more market share, the manufacturer and the retailer implement unconditional return strategy, which does not affect secondary sales. We build a differential game model for the optimal advertising and the optimal advertising cost sharing proportion for centralized and decentralized OAO (Online and Offline) supply chain considering customer returns rates. We further analyze how the returns rates affect the optimal decisions of the manufacturer and the retailer. The results show that the returns rates, the brand reputation and the influence factors of retail channel goodwill on demand of online direct channel strongly influence the optimal advertising decisions. Furthermore, the retailer does not support for the manufacturer advertising efforts in Stackelberg game. Compared with the centralized OAO supply chain, the decentralized system results in channel inefficiency. To coordinate the channels, we design a two-way advertising cost-sharing contract. By this contract, each member of the supply chain reaches a win-win situation and is willing to cooperate. Numerical studies verify the conclusions of this paper.

DOI : 10.1051/ro/2019067
Classification : 90B60, 49J15
Mots-clés : OAO supply chain, customer return, cooperative advertising, Stackelberg game 
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     author = {Cao, Duanyang and Zhang, Xumei and Yang, Lingli and Xiao, Jian},
     title = {Dynamic cooperative advertising strategy in {OAO} supply chain with customer return},
     journal = {RAIRO - Operations Research - Recherche Op\'erationnelle},
     pages = {1537--1553},
     publisher = {EDP-Sciences},
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Cao, Duanyang; Zhang, Xumei; Yang, Lingli; Xiao, Jian. Dynamic cooperative advertising strategy in OAO supply chain with customer return. RAIRO - Operations Research - Recherche Opérationnelle, Tome 54 (2020) no. 5, pp. 1537-1553. doi : 10.1051/ro/2019067. http://archive.numdam.org/articles/10.1051/ro/2019067/

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