Optimal Production And Ordering Decisions Considering Different Consumers’ Behaviors

In manufacturers’ production and retailers’ ordering decisions,consumer behavior usually plays an important role.Due to increasingly serious environmental pollution,consumers have increasing environmental awareness,which will affect manufacturers’ production decisions.In addition,because stockout commonly occurs,consumers are more and more sensitive to service level of retailers.Meanwhile,uncertainty of shopping online leads to consumers to show prudent purchasing behavior.Consumers’ these behaviors will directly affect ordering decisions and benefits of retailers.In this paper,based on consumers’ different behaviors in environment,service and uncertainty,we divide it into three parts.First,we study green production problem considering consumers’ environmental awareness.Manufacturers provide products that have distinct green levels to satisfy consumer demands with different green preferences.A product with a higher green level generate fewer emission but have higher cost.To encourage those manufacturers to produce environmentally friendly product,government can implement subsidy policies.This paper focuses on the decision-making problem faced by manufacturers to determine which green levels of product to produce and production quantities at each green level.We develop a green supply chain model under oligopolistic competition considering environmental awareness and subsidies,with the objective of profit maximization for the manufacturers.We prove the existence and uniqueness of equilibrium and propose a converged algorithm with theory of finite dimensional variational inequality.Numerical results show that an increase of consumers’environmental awareness will incentivize manufacturers to produce more green products with higher green levels,but this does not necessarily lead to higher profits for the manufacturers.Moreover,a well-designed subsidy policy can not only generate more profits for manufacturers,but also save subsidy investment for the government.In addition,with the changes of consumers’ environmental awareness and subsidy policy,manufacturers may obtain more profits even if the competition is more fierce.Second,we discuss minimum commitment considering consumers’ goodwill.A retailer provides products to satisfy consumers whose goodwill towards the retailer is positively correlated to the past fulfillment levels of the retailer.Consumer’s goodwill changes with fulfillment levels and influences the demand.The retailer makes a minimum commitment on order quantity to suppliers who offer price discounts.This paper focuses on the decision-making problem faced by the retailer to determine the minimum commitment at the beginning of the planning horizon and ordering policies in the long run.The objective is the retailer’s profit maximization.We model the problem as a stochastic dynamic programming model and solve the model with a robust optimization approach considering consumers’ goodwill.We find that the retailer’s long-term profit does not necessarily increase with the increased committed minimum quantity and goodwill.All goodwill paths monotonically converge to a constant steady-state goodwill.In addition,the steady-state goodwill may decrease even with increased committed minimum quantity.Third,we investigate optimal ordering policy considering consumers’ prudent purchasing behavior.Online sales has become an important channel for retailers.Perceived value bias commonly occurs between the initial perceived value before purchase and the actual perceived value after purchase.Positive bias leads to sales returns.Stockouts have become increasingly common in online shopping,which leads to consumers to be more prudent in shopping.They often evaluate perceived value bias and product availability before they make purchasing decisions.This paper focuses on the decision-making problem faced by a retailer to determine ordering quantity with the presence of prudent consumers.We first investigate the scenario where the perception of product availability is exogenous.Based on the analysis,the market demands and consumers’ return rates are found to increase in the perception of product availability.The retailer should take measures to increase the perception of product availability when consumers show prudent purchasing behavior.We also consider the scenario where the perception of product availability is endogenous.Numerical results show that perception of product availabilities and consumers’ return rates increase with an increased stocking quantity.Prudent consumers’ high perception of product availability may reduce the firm’s profit,whether it is exogenous or endogenous.