Research On Ordering Policy For Two-Way Substitution With Stochastic Demand

According to the National Natural Science Fund Project - optimal multi-product inventory system with substitute and unreliable supply sources, this thesis studies inventory management under the SCM (Supply Chain Management) condition, which aims to find two products' optimal order quantity that maximizes the retailer's expected profit with stochastic demand and substitution.At first, on the basis of introducing the research background and meaning, chapter 1 summarizes the research status of inventory management in SCM, especially the substitutable product's inventory, and then points out the main research contents and methods .The key work in chapter 2 is to introduce the characters of inventory management in SCM, then provides several traditional inventory control methods under constant and stochastic demand without substitute concretely.Chapter 3 is the key of this thesis. Firstly, the product's substitution is described in different ways. Secondly, ordering policy for two-way substitution is depicted and the reasonable hypothesis is confirmed, based on this to establish the system mathematic model. At last, the retailer's optimal ordering policy is got through mathematical calculation.In chapter 4 mainly to simulate the system model with MATLAB and analyze it. By the aid of the procedure, we may find out each parameter how to influence the retailer's order quantity directly. Then compare it with the newsboy model. Moreover, the conclusion is drawn and some significant management enlightenments are put forward.At last all achievements of the thesis are summed up and some future directions for research is suggested.