Research on Long-term and Short-term Decision of Supply Chain Based on Customer Returns

Transcription

1 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 Researh on Long-term an Short-term Deision of Supply Chain Base on Customer Returns Abstrat Haixia Wang*, Xiaoe Zuo, Danling Zheng Shool of Management, Jinan University, Guangzhou 51063, China With the rapi evelopment of e-ommere, the problem of prout return arouse the attention of enterprises not only, but also the interest of many sholars. Although the role of the e-ommere platform annot be ignore in e-ommere, the effet of e-ommere platform is rarely onsiere in most of the researhes of return uner e-ommere moel. In orer to stuy the impat of the revenue -sharing ontrat on the supply hain s eision base on ustomer returns, we onsier a supply hain ompose of a manufaturer an an e-ommere platform, then onstrut a moel that inlues market eman, ustomer returns an avertising effet, an at last solve the manufaturer s an platform s optimal eision in the ontext of ooperation an non-ooperation by game theory. Finally, we make an analysis about the eision an eision results base on short-term an long-term ooperative an non-ooperative game. The results show that:1) the inrease of prout return rate leas to a higher prout s prie an a lower avertising effort of the e-ommere platform; ) the equilibrium prie, equilibrium avertising effort an equilibrium profit of the supply hain all epen on the game moel between the manufature an the platform an time. Keywors:Revenue Sharing, Customer Return, Avertising, Goowill. 1.INTRODUCTION The rapi evelopment of e-ommere attrats more an more enterprises to join it. The researh ata of iresearh onsultation show that e-ommere market transations in China were $5. trillion in the thir quarter of 016, inrease by 30.8 perent. China's online shopping transation sale was 3.8 trillion RMB in 015, 36.% over the same perio in 014; of whih, BC aounte for 51.9% of the annual share an surpasse CC for the first time. Unlike traitional retail, high prout return rate of e-ommere swallowe the original part of the profits of the enterprise. Therefore, many e-business enterprises pay high attention to the return problem, whereas it is still iffiult to put an en to the ourrene of ustomer returns. The issues of ustomer return also arouse the interest of sholars, suh as Mukhopahyay an Setaputra (007), Bonifiel, Cole (Bonifiel et al., 010), Chen an Bell (009; 011; 01; 013). They all i their researh on the return poliy an the eision-making of the enterprise uner the return poliy. The Dekker an Vlahos researh showe that the ustomer return rate ahieve 35% (Vlahos an Dekker, 007) in online shopping. In some fashion prouts, the prouts return rate reahe up to 74% (Mostar an Teunter, 006). Return management is a very important issue beause returns lea to an average of 3.8% loss of profits eah year (Petersen an Kumar, 010). Compare to offline retailing, return issues are more losely relate to online retailing beause ustomers have no hane to test the quality of the prout, whih is an important aspet of the ustomer's valuation of the prout. In orer to reue the onsumers risks of buying an holing unsatisfatory ommoities an enhaning the ompetitive ege of the enterprise, many manufaturers, retailers, an e-ommere proviers are taking a full refun poliy. Traitional hannels suh as Wal-Mart, Carrefour, an China Resoures Vanguar, an e-ommere hannels suh asjd.om, Tmall.om, Tmall supermarkets have also taken a full refun of the return poliy. In all the researh on the return uner e-ommere moel, most of them ignore the role of the supply hain. Zhang an Yao stuie the priing problem of manufaturers an retailers in the ual-hannel supply hain uner the onition of ustomer return. In the onstrution an analysis of the online moel, the influene of the platform on prout sales was neglete (Xu et al., 010); Rabinovih foun that the online retailer's prie strategy relie on the quality of prouts an servies (Zhang et al., 015). In his researh, he also ignore the influene of the e-ommere on the supply hain. Aoring to above stuies, e-ommere platform play an 793

2 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 important role in the online sales. Therefore, it is espeially ruial to stuy the supply hain eision from the perspetive of manufaturers an suppliers. In the supply hain between manufaturer an e-ommere platform, the ommoity oes not go through the e- ommere platform; the main inome of the e-ommere platform is to share the benefits of manufaturers. For manufaturers, ooperating with a highly influential e-ommere platform an not only inrease their online sales revenue an expan their bran impat, but also help to fous on their prout evelopment an marketing. For the e-ommere platform, ue to the lak of management experiene of various prouts, the business moel of platform rental an not only reue business risk, but also reue the management osts of ifferent ommoities, whih allows them to fous on the management of the platform. In the ooperation between the manufaturer an the e-ommere platform, the e-ommere platform is more ominant. Hene the sharing ratio of benefits of the e-ommere platform is solely etermine by the platform itself regarless the ifferenes of the manufaturers. An the manufaturers have to hoose their partnering platform with a given ratio. Base on the above isussion, uner the irumstanes of ustomer returns an revenue sharing our main researh ontents are: how to make eision on avertising efforts, how the manufaturers formulate the prout prie to maximize their respetive interests or the interests of the overall supply hain.. STATE OF THE ART The literatures relate to our researh are basially revenue sharing, ustomer returns an goowill. In the following literature review, we will mainly srutinize these three aspets. The revenue-sharing ontrat is evolve on the basis of other ontrats an is the most wiely negotiate ontrat. It refers to a oorinating approah whih the supply hain members take to reue the ouble marginal effet an thus improve the overall performane of the supply hain, the prout sales revenue an other reasonable alloation. Chen an Gao pointe out that uner the revenue sharing ontrat, the supplier sells the prout to the retailer at a prie lower than the prime ost, an at the same time the retailer shares part of the sales revenue with the supplier so as to ahieve a higher level of earnings than before (Chen an Gao, 006). The revenue sharing ontrat was first applie in the DVD rental inustry, an the results showe it has improve the orporate earnings. Mortimer also stuie the benefits of the revenue sharing ontrat on improving the inome of the DVD rental inustry. The results showe that the revenue sharing ontrat has signifiantly improve the overall revenue of the supply hain hannel (Mortimer, 00). There are other sholars suh as Xu (010), Zhang an Liu (015), VafaArani an Rabbani (016), Xu an Li (016), Hu an Xu (017) prove that the revenue sharing ontrat improve the performane of supply hain from ifferent angles. The above stuies are base on the traitional business moel, whih the main moe of revenue sharing is the manufaturer istribute their prout to retailers at a lower prie, an share ertain interests from the retailer's inome. However, this moel is not suitable forbc moe beause the retailer oes not exist in this moe, an the wholesale prie oes not exist base on the traitional moel. Therefore, the existing researhes have some limitations. With the rapi evelopment of e-ommere, the return problem oes not only attrat the attention of enterprises, but has also arouse the interest of many sholars. In the researh relate to the return poliy, Mukhopahyay an Setaputra stuie the multi-level priing, return poliy an quality poliy, et. (Mukhopahyay an Setaputra, 007); Bonifiel an Cole fouse on the relationship between quality an the flexibility of return poliy in iret sales moel. By analyzing the relationship between the generality of the return poliy an the quality of retailers, they prove that the generality of the return poliy inrease the ategory of nononsumables (Bonifiel et al., 010); Both (Mukhopahyay an Setaputra, 007)an (Bonifiel et al., 010) analyze the impat of return on istributors an retailers in iret sales, but they ignore the impat of iret selling hannels on istributors an retailers' eisions. In the stuy of prout priing, Zhang an Yao stuie the priing problems of manufaturers an retailers in the ual-hannel supply hain uner ustomer return onitions. The results showe that the higher return rate leas to the revenue loss of the retailers, manufaturers an the overall supply hain (Zhang an Yao, 015).Neverthelss, the moel onstrution an the analysis of online sales in the stuy ignore the influene of the sales platform on sales an returns. Rabinovih foun that online retailer's prie strategy epens on the quality of prouts an servies (Rabinovih et al., 008). But the stuy ignore the impat of the revenue sharing ratio of the online sales platform on retailer priing. Chen an Bell onsiere ustomer return is the funtion of prout sales an prout pries, an stuie the optimal priing an optimal orer of the enterprise (Chen an Bell, 009).MWilliams (01) stuie the return of ompetitive sales for both low-quality an high-quality retailers, an the results showe that returns were 794

3 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 benefiial to low-quality retailers an unermine the interests of high-quality retailers. Liu, Choi, Yuen an Ng (01) stuie the issue of eision-making of onsumer returns base on the retailer's return poliy an prout quality, retailer priing, return prie an quality. Xiao, Shi an Yang (010) stuie the retailer's optimal return poliy an the oorination problem of supply hain ontrat; Li an Xu (01) stuie the return poliy in the pre-sale an normal sales moel on the basis of multi-sales. From the above researh on the return of goos, we foun that the stuies of return moel uner the BCare still relatively limite, an none of them onsier the influene of sales platform on supply hain priing an return poliy. In the stuy of the return uner the bakgroun of traitional business moel, there are few to take revenue sharing into the supply hain eision-making. The stuies that onsiere the retailers or manufaturers goowill as a fator are also very few. This paper will fill the researh gaps of negleting the impat of the sales platform an goowill on ustomer sales. The earliest person who stuie the impat of orporate avertising on the bran's reputation is Jorgensen (000).He use the Nerlove-Arrow moel to reflet the avertising an not only promote the urrent prout sales, but also iniretly affet the prout sales in long-term by influening the bran goowill. On the basis of Jorgensen et.al (000), Jorgensen et.al (001) onsiere the situation that the bran profit was affete by the eline of the marginal revenue in the proess of sales. By the omparison between the ooperative an nonooperative game, stuy showe that the profit of the hannel members uner the ooperative game is higher than the profit of the hannel members uner the non-ooperative game (Jorgensen et al., 001). Base on the moel of avertising sales, He et al. stuie the issues of avertising ooperation an prout priing, an ompare the supply hain avertising eisions an hannel profits between the situations of entralize eision-making an eentralize eision-making. They foun that the supply hain profit in entralize eision-making is higher than that in eentralize hannel. The results also showe that if there is no avertising ooperation, the priing an avertising eision of the supply hain members uner the eentralize eision will have ouble marginal effet (He et al., 009). In the urrent researh on ynami avertising, there are few stuies fouse on the influene of time on supply hain eision an outome. An the results are also onsistent, that is, the priing of prouts uner ooperative eision is lower than that of non-ooperative prout priing. Meanwhile, profit of the ooperative hannel is higher than that of the non-ooperative hannel. After introuing the time fators, we foun that the prout priing uner the ooperative game is not neessarily lower than the non-ooperative prout priing, an the hannel profit uner the ooperative game is not neessarily higher than the non-ooperative game hannel profit. The present researh also has the following shortomings. First of all, for the ustomers in the online shopping, they will inevitably onsier the reliability an influene of the business platform, that is, the reibility of the platform. But in the existing stuies of online shopping an return, it is rarely involve; Seon, the platform leasing is in the prevalene in the urrent e-ommere, whereas the stuy of this moel is still relatively limite; Finally, the urrent stuies of goowill all treat Goowill as a onstant regarless of time fators. Nevertheless, in fat, orporate reputation will be varie with time, whih will lea to ifferent business eisions an results. This stuy tries to solve the shortomings esribe above. In the next setion of the stuy we will establish the moel an give out the orresponing analysis. Setion 4 will solve the moel, an the time-imension is use to analyze the long-term an short-term supply hain eision. 3. METHODOLOGY This paper examines the supply hain that onsists of a manufaturer an an e-ommere platform. The manufaturer sells the prout to the onsumer through the e-ommere platform, whih shares a proportion of the manufaturer's sales revenue. In pratie, the Share is alle tehnial servie fee rate. In orer to expan the influene, the e-ommere platform invests to avertising the platform to improve the goowill of the platform, an thus attrat more manufaturers an ustomers. At the moment of t, the level of avertising input of the platform is A(t), an the level of goowill aumulate by the platform is reore as G(t). The prout prie is p(t). Through the improve Nerlove-Arrow moel, equation (1) epits the favorable rate of hange of the platform: 795

4 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 G( t) A( t) G( t), G(0) G 0 (1) G 0 is the initial impression of the onsumer on the platform, an G 0 >0. λ is the oeffiient of influene on the rate of hange in favorability of the a platform, an λ>0.δis the ba rate of goowill. The ost funtion of avertising is the quarati funtion of the level of avertising input: C( A( t)) ka( t) () Taking into aount the prie of the prout, the favorable effet of the platform on the sales, equation (3) gives the sales funtion of the sales: Q( t) p( t) G( t) (3) α, β, γ is a onstant greater than zero. α reflets market potential, iniating the market eman for prouts in terms of prout pries an goowill for goo business platform. β for the sales prie of the sensitivity, an also on behalf of the market ompetition in the same egree of ompetition. The greater theβ, the more ompetitive the market is, an the more sensitive the onsumer is to the prie of the prout; p is the selling prie of the prout. γ for the goowill of the platform on the impat of sales rate. It is greater than zero, iniating that the platform is goo for the positive sales of goos to promote the role. This has been wiely use in many literatures, suh as Nerlove an Arrow (196), Chintagunta an Jain (199), Visolani an Zaoour (009). R( t) vq( t) (4) Empirial stuies showe a strong linear relationship between prout returns an sales (Anerson, 009). Hess an Mayhew an Anerson (006) showe that ustomer returns rise as prout pries an total sales have risen through an empirial researh. Base on this, we assume that the onsumer returns R is a fixe ratio of total prout sales. In equation (4), 0 v 1, v=0, whih iniates that there is no ustomer return, an v=1 iniates that prouts have been purhase by ustomers are all returne. x is the tehnial servie fee harge by the eletriity provier platform. In the online retail hannel, the e- ommere platform oupies the leaing role within the supply hain. Powerful servie platforms typially harge ifferent tehnial servie rates base on ifferent prouts sol by the manufaturer rather than the ifferene of the manufaturers, an it will remain unhange for a long perio of time. Therefore, in the next analysis of this artile, the tehnial servie fee rate x of the eletriity provier platform is regare as an exogenous variable, an the resiual value of the return prout is assume to be zero. In reality, the ustomer plae orers an pay the fee online. The payment will not immeiately reah the manufaturer's aount, but temporarily reah the e-ommere platform aount an be esrowe by the e- ommere platform. When the ustomer reeive the goo an onfirm the reeipt of payment in the e- ommere Platform system, the money will be transferre from the e-ommere platform s esrowing aount to the olletion aount of the manufaturer. If the ustomer nees to return, after reeiving the goos they an apply for the return iretly. E-ommere platform will onfirm the return appliation, an give the return payment to the ustomer iretly. The payment of goos will not go through the manufaturer. The tehnial servie fee harge by the e-ommere platform is base on the atual sales of the manufaturer, hene the return goos will not be harge by the e-ommere platform. Aoring to this, equation (5) an (6) give the profit funtion of the manufaturer an thee-ommere platform at time t: ( t ) (1 x ) p ( t m )( Q ( t ) R ( t )) Q ( t ) (5) e ( t) xp( t)( Q( t) R( t)) ka( t) (6) 796

5 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 The profit funtion of the supply hain is: ( t) p( t)( Q( t) R( t)) Q( t) ka( t) (7) The subsript m, e, represents the manufaturer, the eletriity provier platform, the supply hain relate eision, the profit an so on. In the next moel solving an analyzing setion, the supersript, iniates the orresponing expression of the supply hain uner eentralize eision an entralize eision. In the infinite time, the manufaturer an the business platform etermine their optimal prout prie an avertising investment to maximize their profits. Their value funtion satisfies the HJB equation. Equation (8), (9) an (10) give the value funtion of the manufaturer an the eletriity provier platform an the supply hain, where ρ is the time isount rate. V x p Q R Q V A G m ' (1 ) ( ) m( ) (8) V xp Q R ka V A G e ' ( ) e( ) (9) V p Q R Q ka V AG ' ( ) ( ) (10) 4. RESULT ANALYSIS AND DISCUSSION 4.1 Steinberg game In the Steinberg main game struture, the e-ommere platform as a hannel leaer etermines its optimal avertising investment on the basis of a given tehnial servie fee rate x. As a follower, the manufaturer etermines its prout prie aoring to the Servie rates an avertising given by the business platform. In the orer of the game, we first alulate the manufaturer's prie uner the given onitions, an then alulate the optimal avertising investment for the profit maximization. Given the power of the ommerial platform avertising A, through the ifferential game theory, proposition 1 gives the manufaturer the prout prie funtion. Proposition 1: For a given payment of e-ommere platform avertising, the manufaturer's prout prie funtion is: G p (1 x)(1 v) (11) From the proposition 1 we an see, (1) the manufaturer's prout prie onsists of two parts, namely, α+γg an. The first part of the prie influene by the basi nees of the market, an the seon part of β (1 x)(1 v) the prie influene by the proution osts an prout returns rate. () p for x an v, respetively, erive p > x 0, p > 0. Thus, the prie of the prout inreases along with the inrease of the tehnial servie v fee rate of the e-ommere platform, an the inrease of the prout return rate leas the manufaturer to inrease the prie of the prout. p p = 0, > 0 an be seen, prout pries are not iretly relate to the A G avertising efforts of e-ommerial platform but positively orrelate with the goowill of e-ommere platform. Substituting equation (3), (4) an (11) into equation (5) an making it greater than or equal to zero yiels:x 1 β. (1 v)(α+γg ) 797

6 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 Beause the goowill of business platform hanges with time an is always not less than zero, an x is the exogenous variable, so if the above formula is establishe, x must be less than 1, s minimum (1 v)(α+γg ) value1 β α(1 v). Makex = 1 β α(1 v), obviously, 0<x <1. When x x, m 0, manufaturers annot benefit from the platform, an will turn to other sales platform or sales hannels. When x<x, m > 0, the manufaturer gains positive benefit, hene they will sell the prout through the platform. so, for the e-ommere platform, the proportion of its share of revenue has a eiling. In pratie, there are upper bouns on the share of revenue sharing for ifferent proviers. For example, T Mall harges a maximum of 5%, Jingong Mall harges a maximum of 15% an Ebay harges a maximum of 10%. Equation (3) an (4) an be obtaine by substituting equation (9) β A V k ' e (1) 1 Ve f G f G f 1 3 (13) ' Ve f1g f (14) (1 vx ) ( ) k k( ) f1 In the ase where the goowill G is not less than zero,f 1 s bigger solution k(δ+ρ+ ) λ make there exist a situation in whih the egree of ilution of the avertising platform is negative, thus exluing the solution. Followe by the solution we get: k( ) f1 (15) f (1 vx ) ( ) (16) f x (1 v) x (1 v) x 4 4 (1 x) (1 v) 4 k ( ) 3 (17) Substituting (15) an (16) into (14) an substituting (1), proposition an be foun. Proposition : In the Steinberg game, the optimal avertising eision for the business platform is: A (1 vx ) G k( ) (18) 798

7 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 A on the G erivative an be obtaine A > 0. At ifferent stages, the avertising platform will pay aoring G to the level of goowill. The higher goowill results in the higher avertising prie that the e-ommere platform nees to pay. A erivatives on the v an be obtaine A v < 0, that is, the inrease in ustomer return rate will reue the ommerial platform avertising efforts. A on the x for the lea A > 0, that is, the higher x share of revenue that the e-ommere platform hols, the bigger avertising efforts that e-ommere platform nees to pay. Substituting (1) an (14) into (1): f f G ( ) G k k 1 (19) The solution an lea to proposition 3 Proposition 3: Uner Steinberg game, the funtion of ustomer's favorable impression on the platform is: f ( 1 ) t ss ss k ( ) ( 0 ) G t G G G e (0) Among them ss f (1 vx ) G k f 4 k ( ) (1 v) x 1 (1) As time approahes infinity, G (t) tens to be its stable valueg ss. The stable value G ss of the goowill of the e- ommere platform is affete by the tehnial servie fee rate. The erivative of G ss on δ, λ, x, β is Gss < 0, Gss λ > 0, Gss X Gss > 0, < 0. The stable value of the goowill of the e-ommere platform beomes smaller β as the elining rate of goowill beomes larger, an it beomes greater as goowill reates greater effiieny of the avertisement. When the tehnial servie fees are harge more by the platform, the stability of the goowill also inrease. Beause when x beomes larger, the prie of the prout will also inrease. In orer to ompensate the reue market sales beause of the inrease prie, e-ommere platform will put more avertising efforts to inrease sales an improve the goowill of the platform at the same time. The greater the sensitivity of the sales volume to prie is, the less the influene of the reputation of the platform. At this point, the ustomer is more sensitive to the prie of the prout, an the impat of the goowill on the purhase eision beomes smaller. Hene the platform will be more inline to reue the ost of avertising to fore the manufaturer to lower own the prie of the prout an thus promote prout sales. The erivative of G ss on v is Gss v < 0, That is, the improvement of the prout return rate will reue the goowill of the platform. Make the supply hain value funtion δ 1 V h G h G h 1 3 () Similarly, (1 v) k( ) h1 799

8 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 h x (1 v)[ k ( ) (1 v) ] k [ ( v ) ((1 v)( x) )] k ( ) ( v ) k (1 x) x v h x v 3 h (1 )( ( ) (1 )) 4k 4 k(1 v)(1 x) 4 k ( ) 4. Cooperative game Uner the ooperative game struture, in orer to maximize the overall profitability of the supply hain, manufaturers an e-ommere proviers jointly etermine the prout prie an avertising investment. At this point, the manufaturer an the e-ommere platform have the same eision-making goals as part of the supply hain. Equation (3) gives the objetive funtion of supply hain uner ooperative game. V p v p G ka p G V A G ' (1 )( ) ( ) ( ) (3) Through the ifferential game theory, proposition 4 gives the optimal prie of the prout. Proposition 4: Uner the ooperative game, the best prie of the prout is: G p (1 v) (4) Compare to the Steinberg game, the prie of the prout uner the ooperative game has the same struture as the prie uner the non-ooperative game. The fators other than x have the same effet on the prout prie. The prie of the prout uner the ooperative game is equal to the prie when x=0 uner the Steinberg game, that is, the optimal prie of the prout uner the ooperative game has nothing to o with x. Equation (3) takes the erivative of A an makes it equal to zero: ' V A k (5) 1 V e G e G e 1 3 (6) ' V e1g e (7) (1 v) ( ) k k( ) e1 e 1 s bigger solution k(δ+ρ+ ) λ makes it possible that the e-ommere platform avertising payment is negative, thus exluing the solution. Followe by the solution we get: k( ) e1 (8) 800

9 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 (1 v) e ( ) (9) 1 e 3 ( )( v ) 4 (1 v) 4 k ( ) (30) Proposition 5: Cooperative game, the best avertising pay: ((1 v) ) A G k( ) (31) Compare to the Steinberg game, the ost of avertising uner the ooperative game onsiere the ost fator γλ k(ρ+ ). In ontrast to the effet of x on the prie of ooperation, the avertising effort uner the ooperation is equal to the ontribution of x=1. A erivative with respet to G an then get AC > 0. G A erivative with respet to v an then get AC < 0.That is, in the ooperative game, return still play a negative v role to avertising efforts. Replae (5) (8) (9) into (1): G e1 e ( ) G k k (3) Proposition 6: Uner the ooperative game, the goowill funtion of the platform is: e1 ( ) t ss ss k ( ) ( 0 ) G t G G G e (33) Among them G ss e ( v ) k e1 4 k ( ) (1 v) (34) G ss erivative with respet to δ, λ, x an then get GSS δ < 0, GSS λ > 0, GSS x = 0. It shows that the stability value of the goowill of the platform is beoming smaller as the elining rate of the goowill of the platform beomes larger. An it beomes larger with the inrease of the oeffiient of the sensitivity of the platform avertisement. In the ooperative game, the stable value of goowill is not relate to x. G ss erivative with respet to v an then get GSS < 0, that is, the inrease in ustomer return rate will reue the stability of the v platform's goowill. 4.3 Comparative analysis In this setion, we analyze the supply hain eision an hannel profit uner the Steinberg game an the ooperative game respetively from the long an short term. In the short-term omparative analysis, the goowill of the Steinberg game an of the ooperative game eision are the same. In the long-term omparative analysis, the goowill of the platform uner ooperation an non-ooperative eision-making hange with time. Hene, analysis shoul bring equation (0) are (33) into the orresponing equation respetively A Comparative Analysis of Goowill in Eletri Business Platform 801

10 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 Equation (34) minus equation (1) yiels: ss ss ss (1 v) (1 v) x G G G ( ) 4 k ( ) (1 v) 4 k ( ) (1 v) x G SS erivative with respet to x an then get GSS < 0, an G SS (x=0)>0, G SS (x=1)<0.let G SS =0 an then x have x GSS =0. As the maximum of x is no bigger thanx,so whenx GSS=0 <x an uring [0, x GSS=0 ], G SS 0;uring (x GSS=0, x ], G SS <0;when x GSS=0 =x,uring [0, x GSS=0 ], G SS 0;whenx GSS=0 >x,uring [0, x ], G SS 0; Equation (33) minus equation (0) yiels: Figure 1. The urve of balane goowill over x 1 f1 e ( ) t ( ) t ss ss ss ss ( 0 ) k k ( 0 ) G G G G G G G e G G e When G SS >0, G>0; when G SS =0, G=0; when G SS <0, G<0; G X X G SS 0 G G X X G SS 0 G t Figure. The urve of goowill over time Table 1 The x an x GSS =0 uner ifferent osts x x GSS = We take ρ=0.0, x=0.08, v=0.3, β=5, γ=1, λ=5, δ=0.5, k=0, α=50 as an example of the analysis an foun that 80

11 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 although the theoretial analysis of the existene of x GSS=0 <x situation, in reality there is often not only one e- ommere platform but multiple e-ommere platform ompeting with eah other, hene the e-ommere platform lowers own x in orer to maintain or improve ompetitive avantage, an thus the reality of x is often lower than x GSS=0. For example, Jingong Mall s range of x is 0.01% -15%, while T-mall s range of x is 0% - 5%. These are muh lower than the theoretial x GSS =0, an x GSS=0 >x. Aoringly, in the next analysis, we only onsier the ase of G SS >0, G>0. As an be seen from Figure 1, G SS an G erease as x beomes larger, whih means that the motivation for ooperation between manufaturers an manufaturers is stronger when x is lower; the motivation for ooperation between manufaturers an manufaturers the weaker when x is bigger Short-term omparative analysis (1) the prie omparison Equation (4) minus equation (11) yiels: p p p 0 (1 x)(1 v) x In the short term, the prie of the prout uner the ooperative game is always lower than the prie of the prout uner the Steinberg game. That is, for ustomers, they are always able to benefit from the short-term ooperation between the manufaturer an the e-business platform. () avertising omparison Equation (31) minus equation (18) yiels: 1 ( ( ) (1 v)( x x )) A A A ( G( ) ) k ( )( ) (35) Aerivative with respet to x an then get A < 0, easy to know that the ifferene of avertising effort x between the ooperative game an the Steinberg game is monotoni, that is, it ereases with the inrease. Substitute x=0 an x=1 into equation (35) an then have A(x=0)>0, A(x=0)<0. There is x A=0 satisfies A(x=x A=0 )=0. When x A=0 <x, uring [0, x A=0 ], A 0; uring (x A=0, x ], A<0; when x A=0 x, uring [0, x ], A 0. A A A x A 0 x Figure 3. The tren of avertising efforts over x (3) profit omparison Channel profits of non-ooperation an ooperation game in short term were: 803

12 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , V h G h G h V e G e G e 1 3 Substitute e 1, e, e 3, h 1, h, h 3 intov,v the high omplexity ofv, V expression makes it iffiult to ompare an analyze by moeling. Therefore, we analyze the profit of hannel uner ifferent eision-making strutures. Take ρ=0.0, v=0., β=5, γ=1, λ=5,δ=0.5,k=0,α=50,g 0 =0.1, e=e, =, G=1. Figure 4. hannel profit urve As an be seen from the figure, whenx VC=0 < x, if x < x VC=0, thenv > V ; if x = x VC=0, thenv = V ; ifx > x VC=0, thenv < V ; In the ase of non-ooperation, the hannel profit is affete by x. In the range of x, the hannel profit inreases with the inrease of x. An the hannel profit is irrelevant with x uner the ooperation moel. Ifx < x VC=0 < x,v > V ;ifx VC=0 < x < x,v < V. Therefore, whether platform an manufaturers will ooperate uner short-term epens on the sope of x Long-term omparative analysis (1) prie omparison analysis Substituting equation (33) into (4), substituting equation (0) into (11), then subtrating: Easy to know when G G = xβ ( G G ) x p p p (1 x)(1 v) xβ, p=0;when (1 x)(1 v)γ G G xβ >, p>0; when (1 x)(1 v)γ G G <, p<0. It is known from the analysis of that (1 x)(1 v)γ G -G beomes larger with the extension of t. When t=t 0, G G xβ =. Hene, it is easy to know, whent<t (1 x)(1 v)γ 0, p<0; when t=t 0, p=0; whent>t 0, p>0. 804

13 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 p p p t 0 t Figure 5.The prout prie urve over time Figure 5 shows that the prie of the prout uner the ooperative game has obviously improve with the extension of time, an the prie of the prout uner the Steinberg game has also inrease, whereas the hange is not signifiant. In reality, when a market is monopolize by an enterprise, the prie of the prout is often higher than the prie of the prout in the perfetly ompetitive market. Therefore, without onsiering the ompetition, the prout prie uner the long-term ooperation between the e-ommere platform an manufaturers is higher than uner the long-term non-ooperation. () Avertising omparative analysis Substituting equation (33) into (31), after equation (0) an (18) A A A ( e1g f1g e f ) k Aoring to the expression of e 1, f 1, e, f, it is easy to know e 1 >f 1, e >f. Base on the analysis of 6.1, in the ase of e 1 >f 1, e >f, when only onsier G >G, A>0. A A A t Figure 6. The tren of avertising efforts over time It an be seen from Figure 6, the avertising effort uner Steinberg game has not hange signifiantly in the long term, the avertising effort uner the ooperation is signifiantly improve in the initial perio, but it tens to ahieve a stability as time goes by. The avertising effort uner long-term ooperation is higher than the nonooperation. As an be seen from the analysis of 4.3.3, the pries of prouts uner the ooperation will graually inrease an exee the pries of non-ooperative prouts in the long term, whih will inevitably lea the supply hain to put more avertising effort into promoting prout sales. An the inrease in avertising will in turn lea to the inrease of prout pries. (3) long-term hannel profit omparative analysis Long-term hannel profits uner the non-ooperation an ooperation game were: 805

14 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , V h G h G h V e G e G e 1 3 Similar to the analysis of the short-term hannel profit, the profitability of the hannel after the substitution of e 1, e, e 3, h 1, h, h 3, G, G is very omplex an annot be moele. Therefore, we also use the form of ase stuy to analyze the long-term hannel profit. Take ρ=0.0, V=0., β=5, γ=1, λ=5, δ=0.5, K=0,α=50, G 0 =0.1, e=e, =, x=0.08. Combine with 4.3.3, it an be seen that in the long-term non-ooperation situation, the e-ommere platform avertising ost has not inrease signifiantly over time so the goowill an the ost of e-ommere platform maintain a basi state of stability. The prie of the manufaturer s is also remaine basially stable uner the long-term non-ooperation situation. Aoring to sales moel we an see that prout sales will not be a substantial inrease or eline. Consequently, the hannel profits remain stable in the ase of long-term nonooperation. V C V V x Figure 7. Long-term hannel profit urve over time Long-term ooperation, although the prout prie in the long-term ooperation is higher than the prie of nonooperation uner ertain onitions, an to a ertain extent, the eman of the prout is therefore erease, the final eman is improve thus the overall profit hannel inrease beause the reputation of the e-ommere platform is muh higher than the orresponing value of non-ooperation. 5. CONCLUSION In orer to stuy the long-term an short-term eision-making of the supply hain with the ustomer return, this artile, by introuing the goowill of the e-ommere provier platform, mae a researh on the priing eision an avertising eision of a supply hain ompose of an e-ommere platform an a manufaturer, an the goowill an the hannel profits of e-ommere platform uner ifferent eisions. Finally, this paper rew the following main onlusions: (1) The inrease of ustomer return rate oes not only raise the manufaturers prout prie, but also reue the egree of avertising efforts of the e-ommere platform an the stable value of the goowill of the e-ommere platform. () In the short term, the prie of the prouts uner the ooperative game is always lower than that of the Steinberg game. However, the avertising efforts an the hannel profits in ifferent eision-making moes are not absolutely ifferent ue to the share of revenue sharing. (3) In the long term, the prie of the prout uner the ooperative game is higher than the prie of the prout uner the Steinberg game, an the avertising effort an the hannel profit uner the ooperative game are always higher than that of Steinberg's avertising effort an hannel profit. 806

15 Revista e la Faulta e Ingeniería U.C.V., Vol. 3, N 5, pp , 017 This stuy is ifferent from the existing researhes whih neglet time fator in the eision-making of manufaturers an platform firms. It makes this researh has a strong pratial value on the priing eision an avertising eision of manufaturers an platform proviers. The main limitation is that the prout eman funtion is preetermine to be linear. In reality, the eman funtion of the prout is not ompletely linear, an it is more inline to be a nonlinear funtion. This researh assume that the prout eman funtion is linear, whih is similar to many other literatures. For one of the reasons, it is easy to solve an analyze. An the reason is to assume the linearity of the prout eman funtion oes not affet the main onlusions of this stuy. On the basis of this artile, the impliations towars future researh oul be: 1) the introution of ompetitive elements. The objet of this stuy is a supply hain ompose of a manufaturer an e-ommere platform. In the future work, we an onsier ifferent types of the supply hain, suh as multiple manufaturers with one e- ommere platform, multiple e-ommere platforms with one manufaturer, or multiple manufaturers with multiple e-ommere platforms, et; ) the introution of prout bran reputation. More an more wellknown brans join in the online sales hannels makes the onsumers are not only influene by the prout prie but also the reputation of prout bran when making purhase eision. Therefore, in the future researh, we an onsier the impat of the bran reputation on ustomer eision-making. REFERENCES Arani H.V., Rabbani M., Rafiei H. (016). A revenue-sharing option ontrat towar oorination of supply hains, International Journal of Proution Eonomis, 178(3), Bonifiel C., Cole C., Shultz R.L. (010). Prout returns on the Internet: A ase of mixe signals, Journal of Business Researh, 63(9-10), Chen F., Gao C. (006). Multi-Stage Supply Chain Coorination by Revenue Sharing Contrats, Journal of Wuhan University (nature siene), 5(3), Chen J. (011). The impat of sharing ustomer returns information in a supply hain with an without a buybak poliy, European Journal of Operational Researh, 13(3), Chen J., Bell P. (013). The impat of ustomer returns on supply hain eisions uner various hannel interations, Annals of Operations Researh, 06(1), Chen J., Bell P.C. (009). The impat of ustomer returns on priing an orer eisions, European Journal of Operational Researh, 195(1), Chen J., Bell P.C. (011). Coorinating a eentralize supply hain with ustomer returns an prieepenent stohasti eman using a buybak poliy, European Journal of Operational Researh, 1(), Chen J., Bell P.C. (01). Implementing market segmentation using full-refun an no-refun ustomer returns poliies in a ual-hannel supply hain struture, International Journal of Proution Eonomis, 136(1), He X.L., Prasa A., Sethi S.P. (009). Cooperative Avertising an Priing in a Dynami Stohasti Supply Chain: Feebak Stakelberg Strategies, Proution an Operations Management, 18(1), Hu B., Xu D., Meng C. (017). Inonsisteny of a retailer's optimal poliies an hannel performane uner revenue sharing ontrats, International Journal of Proution Eonomis, 183(8), Jorgensen S., Sigue S.P., Zaour G. (000). Dynami ooperative avertising in a hannel, Journal of Retailing, 76(1), Jorgensen S., Taboubi S., Zaour G. (001). Cooperative avertising in a marketing hannel, Journal of Optimization Theory an Appliations, 110(1), Li Y., Xu L., Yang X. (01). Avane Selling, Return Poliy an Failure False Return for a Newsvenor Retailer. Nankai Business Review, 15(5), Liu N., Choi T.M., Yuen C.W.M., Ng F. (01). Optimal Priing Moularity an Return Poliy Uner Mass Customization, IEEE Transations on Systems, Man, An Cybernetis Part A: Systems an Humans, 4(3), Mwilliams B. (01). Money-Bak Guarantees: Helping the Low-Quality Retailer, Management Siene, 58(8), Mortimer J.H. (00). The Effets of Revenue-Sharing Contrats on Welfare in Vertially Separate Markets Eviene from the vieo Rental Inustry, HIER Disussion Paper Series, 8(3), Mostar J., Teunter R. (006). The newsboy problem with resalable returns: A single perio moel an ase stuy, European Journal of Operational Researh, 169(1), Mukhopahyay S.K., Setaputra R. (007). A ynami moel for optimal esign quality an return poliies, European Journal of Operational Researh, 180(3),

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