Research on Supply Chain Stability Driven by Consumer's Channel Preference Based on Complexity Theory

At present, most of the manufacturers are increasingly laying emphasis on dual-channel selling. The level of consumer's preference is diverse with different channels. This study discusses a supply chain where one common manufacturer uses two different channels to sell product. The bounded rationality expectation has been applied to explore the decision-making mechanism in finalizing the wholesale prices and sales commissions for the manufacturer and retailers. In addition, the dynamic features of the system are simulated by 2D bifurcation diagram, the largest Lyapunov exponent, attractor variation, and time series. The simulation results suggest that if the adjustment speeds of the wholesale prices and sales commissions change drastically, the system would fall into a chaotic state. If the consumers prefer the online channel, the wholesale prices and sales commissions may be raised and vice versa. However, too strong preference of each channel will make the system appear to have a considerably periodic fluctuation, even chaos. In the meantime, the parameter adjustment method can help make the periodic or chaotic system go back to stability. Therefore, the significance of this study is with a practical meaning to make better pricing strategy for players in dual- channel selling supply chain system.