The total profit model of a manufacturer – Two retailers through online and offline sales media

The level of public consumption and internet usage in the last few decades continues to increase every year. It causes business leaders to expand their sales strategy, from offline sales to both offline and online. DCSC is a system that combines two sales media, namely online and offline. The total profit model of the system consists of a manufacturer and two retailers with the DCSC system in which inter-retailers have unequal market power is developed in this study. The DCSC model is constructed to maximize the total profit of the system. Based on the model obtained, an optimal solution is determined by considering the sufficient condition and necessary condition of a multivariable function. Based on the result of an application, we obtained a maximum total profit of $3,440,900 when standard product orders at the retailer I are 252 units, standard product orders at the retailer II are 204 units and the custom product orders are 101 units per production time cycle. After the sensitivity analysis has been carried out, a maximum profit of $9,867,160 is reached when the demand proportion of online media is 0.9..