Optimizing Hybrid-Channel Supply Chains with Promotional Effort and Differential Product Quality: A Game-Theoretic Analysis

Many manufacturers sell products of differential quality to retailers or directly consumers, and the might promote high- low-quality products. Given different channel structures, how can supply chain be optimized? We developed a game-theoretic framework with manufacturer retailer as leader follower, respectively, makes promotional effort. examined effects product quality, effort, hybrid channels on performance in four dual-channel structures. found that, regardless qualities, generally prefer engage promotion even though are reluctant share costs. However, effort does not always improve profit across channels, there is an interaction between product-channel structure The preferences all feasible regions levels within aforementioned structures ranked. There exists region where achieve Pareto improvement without any additional coordination mechanism, both players (Π4) that high-quality Moreover, extended analysis suggests less significant variety is, made by