Information Value in a Dual-channel Supply Chain under Revenue Sharing Contract

This paper assesses the impact of sharing customers’ channel preference information on pricing and performance in a dual channel supply chain, where the supplier opens a direct channel and a traditional retailer owns a retail channel. Both the supplier and the retailer perform their forecasting demands based on the ratio of consumers’ preferences in the direct channel when we consider the characteristics of consumers’ purchase in electronic commerce, while the supplier as a Stackelberg leader designs a revenue sharing contract with the retailer to share the profits in his direct channel. The two scenarios are analyzed under complete information and incomplete information on the ratio of consumers’ preferences in the direct channel. The paper finds that information sharing always benefits the supplier, but may hurt the retailer. Therefore, the supplier should design the revenue sharing contract to incent the retailer to share her information. Moreover, the paper obtains the conditions under which the retailer is willing to share her information with the supplier. Key–Words: Supply chain management; Online channel; Revenue sharing contract; Information sharing; Consumer channel preference; Stackelberge game