Outsourcing Dual-Channel Supply Chain Decision-Making under Illegal Market Infiltration by Contract Manufacturers
To reduce channel conflicts in the outsourcing dual-channel supply chain,this paper takes a three-echelon supply chain system composed of a brand enterprise,a contract manufacturer,a physical retailer,and an online retailer as the research object.Two different supply chain power structure models of the contract manufacturer's illegal market encroachment and a four-party pricing game model are constructed.By solving the four-party pricing game model,the outsourcing dual-channel supply chain decision-making problem is stud-ied when the contract manufacturer illegally infiltrates the market.The research results show that under both sup-ply chain power structures,the contract manufacturer will choose to violate the contract and infiltrate the market.Whether the brand enterprise will supervise the contract manufacturer depends on the cost of supervision.When certain constraints are met,the contract manufacturer's illegal market encroachment can increase the profits of the brand enterprise and the physical retailer.The choice of power structure in the outsourcing dual-channel supply chain where the contract manufacturer illegally infiltrates the market depends on the degree of consumer accept-ance of electronic channel products.Cooperation between the brand enterprise and the physical retailer to reduce product supply costs and sales costs is key to addressing the risks of the contract manufacturer's illegal market en-croachment and increasing profits for all parties.
illegal market infiltration by contract manufacturersoutsourcing supply chaindual-channel supply chainfour party pricing game