A Newsvendor Problem with two Suppliers under Dual-Channel Supply Chain and Supply Disruption

In this paper, we consider a newsvendor model in which the retailer can source from two suppliers. One supplier sells products through a dual channel framework, which includes a direct channel and a retailer channel. The other supplier sells products only through the retailer. The wholesale price of the dual channel supplier is cheaper, but supply disruption may occur with a certain probability, whereas the other supplier is perfectly reliable with a higher wholesale price. We study a risk-neutral retailer's decision-making on the optimal order quantities from both two suppliers. Then in numerical analysis, we examine the sensitivity of the disruption probability, the wholesale price, market shares of two channels and the direct price on the optimal decisions.