This grant provides funding for the study of multichannel supply chain management with opaque service enterprises. The study will provide insights into how consumers react to the opaque service enterprises by analyzing the consumer behavior in a multichannel environment with uncertain demand. At the retailing level, competition among opaque and non-opaque retailers will be scrutinized by unitizing dynamic pricing, ordering, and revenue management techniques. The interaction among retailers and suppliers will be modeled while taking capacity allocation, wholesale price contract, and other dimensions into consideration. A menu of multiple transparency levels will be designed to optimally exploit the market. The entire supply chain efficiency and social welfare optimization will be factored into the managerial insights. Supply chain coordination mechanisms will be discussed in a variety of circumstances including the coexistence of opaque and non-opaque distribution channels under competition.
If successful, the results of this research will lead to the development of a framework in dynamically determining the optimal ordering and pricing in multichannel opaque market when there are stochastic demand and supply; the evaluation of optimal bidding strategy for heterogeneous customers; the design of new business models using different transparency and opaque levels to serve the various consumer segments; and the development of new techniques for analyzing the dynamic interaction between the opaque retailers and suppliers. These research activities together will offer a deeper understanding of the operational structure and the mechanism of opaque internet market which is becoming part of our daily life. The proposed approaches will also be useful for analyzing other multichannel systems, such as an auction channel model, and the revenue management problems for a supply network.
