r or o

Represent the traditional retail channel and the online channel, respectively.

D

Refers the primary market demand (i.e., the potential demand if the goods are free of charge).

$D_i$

Presents the demand from the traditional retail channel or the online channel ( $i=r$ or o),

$q_i$

Describes the retailer’s order quantity to the supplier at the beginning of the sales period ( $i=r$ or o).

$a_i$

Represents the self-price sensitivity of channels ( $i=r$ or o).

${\sigma }_i$

Refers the cross-channel price sensitivity of channels ( $i=r$ or o).

$\theta$

Presents the degree of customer acceptance in the traditional retailer channel, correspondingly, $1-\theta$ represents the degree of customer acceptance in the online retailer channel.