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Free riding in a multi-channel supply chain

Publication ,  Journal Article
Bernstein, F; Song, JS; Zheng, X
Published in: Naval Research Logistics
December 1, 2009

Free riding in a multichannel supply chain occurs when one retail channel engages in the customer service activities necessary to sell a product, while another channel benefits from those activities by making the final sale. Although free riding is, in general, considered to have a negative impact on supply chain performance, certain recent industry practices suggest an opposite view: a manufacturer may purposely induce free riding by setting up a high-cost, customer service-oriented direct store to allow consumers to experience the product, anticipating their purchase at a retail store. This article examines how the free riding phenomenon affects a manufacturer's supply chain structure decision when there are fixed plus incremental variable costs for operating the direct store.We consider factors such as the effort required to find and buy the product at a retail store after visiting the direct store, the existence of competing products in the market, and the extent of consumer need to obtain direct-store service. Copyright © 2009 Wiley Periodicals, Inc.

Duke Scholars

Published In

Naval Research Logistics

DOI

EISSN

1520-6750

ISSN

0894-069X

Publication Date

December 1, 2009

Volume

56

Issue

8

Start / End Page

745 / 765

Related Subject Headings

  • Logistics & Transportation
  • 4901 Applied mathematics
  • 3509 Transportation, logistics and supply chains
  • 1503 Business and Management
  • 0103 Numerical and Computational Mathematics
  • 0102 Applied Mathematics
 

Citation

APA
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ICMJE
MLA
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Bernstein, F., Song, J. S., & Zheng, X. (2009). Free riding in a multi-channel supply chain. Naval Research Logistics, 56(8), 745–765. https://doi.org/10.1002/nav.20379
Bernstein, F., J. S. Song, and X. Zheng. “Free riding in a multi-channel supply chain.” Naval Research Logistics 56, no. 8 (December 1, 2009): 745–65. https://doi.org/10.1002/nav.20379.
Bernstein F, Song JS, Zheng X. Free riding in a multi-channel supply chain. Naval Research Logistics. 2009 Dec 1;56(8):745–65.
Bernstein, F., et al. “Free riding in a multi-channel supply chain.” Naval Research Logistics, vol. 56, no. 8, Dec. 2009, pp. 745–65. Scopus, doi:10.1002/nav.20379.
Bernstein F, Song JS, Zheng X. Free riding in a multi-channel supply chain. Naval Research Logistics. 2009 Dec 1;56(8):745–765.
Journal cover image

Published In

Naval Research Logistics

DOI

EISSN

1520-6750

ISSN

0894-069X

Publication Date

December 1, 2009

Volume

56

Issue

8

Start / End Page

745 / 765

Related Subject Headings

  • Logistics & Transportation
  • 4901 Applied mathematics
  • 3509 Transportation, logistics and supply chains
  • 1503 Business and Management
  • 0103 Numerical and Computational Mathematics
  • 0102 Applied Mathematics