Mixed-channel inventory policy between retailer and e-retailer stores in two-echelon supply chain

In this paper, we study a mixed-channel supply chain system which comprised by one manufacturer and one retailer. Customers can make purchases either from the retailer or directly from an e-tail store which is operated by the manufacturer. From the manufacturer's perspective, we study a Stackelberg inventory strategy to obtain the optimal inventory levels in retail and e-tail stores and the optimal wholesale price of manufacture. Managerial insights are provided to illustrate the applicability of the optimal strategies, the most important one is the manufacture can choose the optimal main channel based on the demand split proportion.