Inventory Conflict and Coordination of Supply Chain with Hybrid Channel

A hybrid channel refers to the channel combined the traditional retailing channel and the online direct-selling channel under the e-commerce environment. A major challenge in hybrid channel lies in the inventory conflict. We compare the different inventory strategies between two modes, one of which refers to both manufacturer and retailer hold inventory, the other of which refers to only retailer holds inventory. Through analysis, we find mode two bring more profit than mode one in hybrid channel supply chain, but manufacturer's profit may decrease. So a proper contract should be built to guarantee the double-win between manufacturer and retailer.