* Corresponding author Tel. :+918460801123 E-mail: um18119190@gmail.com (U. Pathak) 2020 Growing Science Ltd. doi: 10.5267/j.ijiec.2020.1.002 International Journal of Industrial Engineering Computations 11 (2020) 377–400 Contents lists available at GrowingScience International Journal of Industrial Engineering Computations homepage: www.GrowingScience.com/ijiec Price and profit decisions in manufacturer-led dual-channel supply chain configurations Umangi Pathak a* , Ravi Kant a and Ravi Shankar b a Sardar Vallabhbhai National Institute of Technology, India b Indian Institute of Technology Delhi, India C H R O N I C L E A B S T R A C T Article history: Received September 25 2019 Received in Revised Format December 28 2019 Accepted December 31 2019 Available online January 2 2020 In the world of digitization, e-commerce practices has become more popular and attracts manufacturers to combine their traditional retail channel with an e-channel. To add some salient features in the existing study, this study develops an optimal pricing and profit decision model for manufacturer-led dual-channel supply chain configurations; namely Vertically Integrated Dual-Supply Chain (VID-SC), Decentralized Dual-channel Supply Chain (DD-SC), Partially Integrate Dual-Supply Chain (PID-SC) and Horizontally Integrated Dual-Supply Chain (HID- SC). The aim of this study is to examine the effect of selected decision parameters namely cooperative advertisement, delivery lead time and free-riding on price and profit of manufacturer-led dual supply chain configurations. A linear programming for profit maximization is developed and backward induction method is used to find the optimum values of price and profit. A numerical analysis is performed to evaluate the effect of selected decision parameters on price and profit. To check the robustness of the outcomes an interaction plot is made to indicate the relationship between the selected decision parameters on optimum price. The best fit values of these decision parameters lead to the optimum price and the profit. The study helps to find the best fit value of the selected decision parameters for their specified dual- channel configuration. As a result, the model contributes as a guideline moreover it is proficient to guide manufacturers and channel members as a decision making practices without actual implementation of any strategy or policy. © 2020 by the authors; licensee Growing Science, Canada Keywords: Dual-supply chain E-Commerce Cooperative advertisement Lead time Free-riding 1. Introduction Rise in digitalization, improved logistic infrastructures, increased fuel cost and development of e- technologies make a significant change in customers’ consumption, purchase pattern and their preferences (Pu et al., 2017). Moreover in today’s competitive environment and busy life, firms strongly need adoption of a business strategy which can help to get bigger market exposure with a controlled price, less inventory and inferior entry barriers (Choi, 2003). To resolve these issues, companies such as IBM, Dell and Apple have adopted e-business practices and obtained a noticeable change in their demand and profit (Matsui, 2016). Nonetheless, adoption of e-channels at the cost of eliminating retail practices is not a good decision because with the customer’s viewpoint retail market is the most trustworthy, simple and convenient mode of purchase (Mahar et al., 2009). Real visualization, demonstration of products, in hand quality assurance, no waiting time, bargaining power of customer, service, repair at near premises and requisite of the customized product make retail market alive and compete to the e-tail market at each stage (Wang & Ji, 2010). As a result, manufacturers are more