Joint optimization of online selling mode and logistics service strategy in e-commerce market with uncertain information.

In this paper, we consider a manufacturer who sells its products through an e-commerce platform. The manufacturer can decide whether to wholesale its products to the platform (namely the wholesale mode) or sell them directly to consumers through the platform and pay a commission (namely the agency mode). Meanwhile, there are two logistics service strategies within the e-commerce market, i.e., logistics service offered either by the manufacturer or the platform. Given the lack of historical samples of new products and the uncertainty of the e-commerce market, we characterize the unit cost of products and consumers' sensitivity to logistics service as uncertain variables. We explore the joint decision models for the online selling mode and logistics service strategy in the e-commerce market with uncertain information. Our findings indicate that the logistics service provided by the platform under the wholesale mode can achieve a 'win-win' outcome for both the manufacturer and the platform. However, under the agency mode, both the manufacturer and the platform prefer to take on the logistics services by themselves. Furthermore, the highest level of logistics service and the lowest retail price can be obtained when the manufacturer provides logistics service under the agency mode. The results reveal that as the uncertainty of unit cost of products or consumers' sensitivity to logistics service increases, the manufacturer and the platform can obtain greater expected profits by appropriately altering their pricing decisions. [ABSTRACT FROM AUTHOR]