Annals of Operations Research https://doi.org/10.1007/s10479-018-3040-7 S.I.: REALCASEOR Location-based pricing and channel selection in a supply chain: a case study from the food retail industry Chen Wei 1 · Sobhan Asian 2 · Gurdal Ertek 3 · Zhi-Hua Hu 1 © Springer Science+Business Media, LLC, part of Springer Nature 2018 Abstract Many retailers nowadays operate in an Internet-enabled dual-channel supply chain setting, referred to as “click and mortar”. In such a structure, products and services are delivered through both online B2C (business-to-consumer e-tail) and offline B2C (traditional brick and mortar retail) channels. In this paper, we develop and present a unified modeling approach that reflects a real-world dual-channel supply chain in the food retail industry. Motivated by the actual business operations of a case study, we incorporate the spatial locations of customers, as well as other logistics and operational costs, into the service provider’s pricing and the customers’ channel choice decisions. We develop two models, namely the benchmark and proposed models, and conduct extensive numerical experiments with parameter values centered on actual values. The results reveal that the ratio of online and offline profit to the total dual-channel profit vary significantly, depending on the locations of customers and the values of the logistics costs. In addition, our statistical and visual analysis suggest that by jointly optimizing the logistics and operational processes, the service provider can achieve a considerably high profit through both channels, without necessarily expanding the size of its geographical service areas. Keywords Location-based pricing · Channel selection · Dual-channel supply chains · Food retail industry · E-commerce logistics 1 Introduction The food industry is a critical sector within the world economy, as well as any nation’s economy. In 2016, the total value of the global food and agricultural industry was estimated to be USD eight trillion (Plunkett Research 2017). The food and beverage, grocery (including non-food) and fresh produce sectors in Aus- tralia—where our case study is based—had an annual turnover of AUD 127.4 billion, and B Sobhan Asian s.asian@latrobe.edu.au 1 Logistics Research Center, Shanghai Maritime University, Shanghai, China 2 La Trobe Business School, La Trobe University, Melbourne, Australia 3 College of Business, Abu Dhabi University, Abu Dhabi, UAE 123