Research On Shelf Display And Inventory Control Models For Supply Chain

With the rapid improvement of technology and the globalization of the market economy,product diversification and personalized customer demand get more and more prominent and thelevel of retailing competitiveness also becomes more competitive. In order to get the advantage ofcompetition, a retailer has to work with suppliers together to joint optimize marketing and operation,such as shelf display and inventory control. Shelf display can stimulate demand and increase sales byserving as a retailer's main selling tool and a promotional tool (e.g., by increasing product visibility).On the other hand, due to the scarcity and imptance of shelf space, manufacturers compete for moreattractive display area and more shelf space by making incentive mechanism, such as lowerwholesale price, higher slotting allowances and so on. Therefore, joint optimization shelf spaceallocation and display area selection is not only the weapon of competing for higher sharing ofmarketing, but also an effective measure of negotiating with suppliers for retailer. However, efficientretailing management requires not only arousing higher customer demand but also decreasing costsas low as possible. Inventory control is an important tache in decreasing costs. Therefore, studyingthe theory and methods of shelf display and inventory control and supply chain coordination hasimportant practical value and theory meaning. In this dissertation, shelf display and inventorycontrol are proposed as the research objects. According to retailer's and supply chain's respect,multi-item shelf display and inventory control and supply chain coordination models are developed.The main work and innovations of the dissertation are summarized as follows.1. Optimization models of shelf space allocation and display area selection for retailer. Theshelf space allocation problem is discussed with considering slotting allowance varying with displaylocations. A dynamic programming model is developed and four algorithms are proposed. Firstly, wepropose an approach which is similar to the algorithm used for solving a knapsack problem. Basedon the algorithm, two improve heuristic algorithm and a hyper-heuristic base on simulated annealing (HSA) are proposed. The performance of four algorithms is compared by simulated numericalexamples. It is shown that:(1) Hyper-heuristic base on simulated annealing always gets the highestprofit and can solve large scale size of problems in reasonable time.(2)The policy of shelf spaceallocation varies with slotting allowances. HSA always performances best in finding out the optimalsolution and its superiority increases with slotting allowances.2. Joint optimization models integrated shelf display policy with inventory control for retailer.The dissertation presents a more realistic formulation of the demand by incorporating the impact ofspatial relationships into demand function, as well as the effects of display location and displayedinventory on demand. We develop joint optimization model integrated shelf display and jointreplenishment policy, a more efficient inventory control policy, except individual replenishmentpolicy. A multi-stage simulated annealing based hyper-heuristic algorithm is proposed to solve theseproblems with different problem sizes. Numerical simulations suggest that:integrated multi-factor ofshelf display obtain more attractive planogram and higher sales; the joint optimization model underjoint replenishment not only provides rather different shelf space allocation, display area selectionrule and replenishment policy, but also leads to superior profit performance, as compared to theexisting related models and rules-of-thumb. Thus the joint optimization model provides a decisionsupport tool for retailers to increase profit by integration of multi-item shelf display arrangement andinventory control.3. Models of shelf space allocation and pricing according to three different supply chainstructures.(1)Consider an integrated supply chain.(2)Consider a two-echelon supply chainconsisting of two dominant manufacturers and one retailer as follower under a wholesale-pricecontract. A game model is developed in which manufacturers play Stackelberg game with the retailerand two manufacturers play Nash game with the other. An integrated supply chain decision model isalso developed. And the supply chain perfect coordination and Pareto improvement can be achievedthrough display-cost-subsidy-plus-profit-sharing policy.(3)Consider a two-echelon supply chainconsisting of one dominant retailer and two manufacturers as followers under a consignmentcontract. At first, the retailer decides on the revenue-sharing percentage and the slotting fee, the manufacturers then decide on the retail price and the size of shelf-space simultaneously. For eachitem sold, the retailer deducts an agreed-upon percentage from the selling price and remits thebalance to two manufacturers. Each of the two manufacturers plays Nash game with the other andplays Stackelberg game with the retailer who acts as lead. A game model and an integrated supplychain decision model are developed. A two-part slotting allowance contract is proposed to achievesupply chain coordination and Pareto improvement. Some managerial insights are obtained in bothdecentralized supply chain cases: the lower the manufacturer's cost, the stronger his/hercompetitiveness; the retailer can benefit from the competition of two manufacturers. It is also shownby comparing the three cases that: the integrated supply chain performance best in decreasingretailing price and increasing shelf space allocated and supply chain's profit. The decentralizedsupply chain under wholesale price contract performances worst.4. Joint inventory control models for a two-echelon supply chain. Multi-item jointreplenishment models are developed for a two-echelon supply chain, which consists of a MTO(make to order) or MTS (make to stock) manufacturer and a retailer selling multiple items. Thethree-echelon inventory system includes manufacture's raw material and finished product andretailer's product. Three replenishment models are formulated to study the impact of multi-echeloncooperation and multi-product joint replenishment on the total cost of the channel and the parties.The properties of the optimal solutions for the proposed models are then analyzed. Numericalsimulations show that model JC(both the manufacturer and the retailer make the joint replenishmentpolicy jointly) performs better in reducing the average total cost of supply chain, as well as themanufacturer, as compared to model JN(the manufacturer and the retailer make joint replenishmentpolicy individually). But it is just reverse for the retailer. In addition, permissible delay in payment isadopted to achieve the coordination of supply chain.The research results presented above not only enrich the content of shelf display, inventorycontrol and supply chain coordination theory but also further accelerate the applied areas of thesemodels of shelf display, inventory control and supply chain coordination, and provide moresufficient scientific evidence and decision support tools for retailers to joint optimize marketing and operation management and achieve supply chain coordination.