Numerical Analysis And Inventory Models With Substitution In Supply Chain Environment

With individualizing of customer requirements and increasing of market competition day by day, enterprises often adopt marketing or manufacturing tactics of product differentiation, that is, every kind of product has different market orientation and meets different customer requirement, but there is certain substitutability between similar products. Under this background, it is a severe challenge for every manager to design the stocks of product so as to maximize total profits.On the basis of forefathers' researches, this dissertation studies the two-product inventory with one-way substitution in supply chain environment. One-way substitution means that demands for lower class's product can be satisfied by using the stocks of higher class's. The main contents of the dissertation can be concluded as follows:(1) Aiming at two kinds of products with one-way substitution, from the retailer's view, two kinds of extended inventory models are established considering pricing and ordering at the same time in this dissertation, In one model it is assumed that order prices and substitute prices are determinate, but selling prices are unknown; in the other it is assumed that order prices and selling prices are determinate, but substitute prices are unknown. Because of the complexity of the models, it is not easy to get their analytical solutions. In virtue of MATLAB, we numerically analyze the changes of optimum total profit with different values of unit trade prices, unit net scrap values and unit loss out of stock, and draw on several important conclusions which are different with the results derived in the basic inventory model with substitution.(2) The scope of research about substitute products is extended to the two-level supply chain containing one supplier and one retailer. Under the supplier and the retailer's non-cooperative situation firstly, the impact of product substitution on the two-level supply chain is studied in this dissertation. Then, two Stackerlberg game models are developed and analyzed. One model uses one substitution strategy, and the other does not. In these two models, Nash equilibrium solutions are derived, and changes of trade prices and order quantities are studied as unit selling cost changes. And then considering whether the supplier is cooperative with the retailer or not, the profits of supply chain are compared by numerical results. Finally, using simple proportion value method and Shapley value method, cooperative profits in the two-level supply chain with substitution are assigned simply and reasonably.