Research on pricing, service and logistic decision-making of E-supply chain with ‘Free Shipping’ strategy

Abstract

Considering the cost of logistic service and the ‘Free Shipping’ strategy, two models of E-supply chain, respectively dominated by e-commerce platform or manufacturer are constructed, and the optimal decisions for each model is calculated in this paper. The research indicates that: the sales price is lower and the profit of manufacturer is higher in the mode dominated by manufacturer. On the other hand, the platform’s service-level is lower and the profit of platform is higher in the mode dominated by dominant platform. Further, the sales price, platform’s service and platform’s profit will increase with the growth of commission and decrease with the service cost elasticity coefficient. Contrarily, the profit of manufacturer will decrease with the growth of commission but increase with elasticity coefficient. And, the logistic price and profit of logistic enterprise are higher in the mode dominated by manufacturer, moreover, they will decrease with the growth of commission.