The Study Of The Retailer's Ordering Policy For Quality Unreliable And Substitutable Commodities

At present, many scholars studied the inventory problem without considering the defective products in the before, but product quality is not always perfect in fact. These defective products add the inventory cost and reduce the customer service level. With the market competition becoming heavily and the consumer's individuation and diversification enhancing, the study of the retailer's ordering policy for quality unreliable and substitutable commodities will be more important than before. This paper studies inventory management under the SCM (Supply Chain Management) condition, which aims to find the optimal order quantity that maximizes the retailer's expected profit with stochastic demand, quality unreliable and substitution.On the basis of introducing the research background and meaning, this paper discusses inventory problem of single-period, quality unreliable and substitutable commodities under the SCM. Firstly, we discuss the ordering policy of quality reliable and quality unreliable under one supplier. Secondly, we discuss the ordering problem of completely substitutable commodities under one supplier with quality reliable and the other with quality unreliable. And then, we discuss the ordering problem of one-way substitutable commodities under one supplier with quality reliable and the other with quality unreliable. Lastly, numerical examples are given to illustrate the models in this paper by MATLAB and EXCEL, and some significant management enlightenments are put forward.We study the quality unreliable ordering problem by theory analysis and demonstration analysis. At first, we put forward assumptions about actual problem, and then set up the model, resolve, numerical analysis and graph emulation by software, and draw the following conclusions: Firstly, the retailer does not order from one quality unreliable supplier alone. Secondly, the retailer's expected profit from one quality reliable supplier and one quality unreliable under certain condition will be higher than from one quality reliable supplier alone. Thirdly, the substitutable price as same as the substituted product's price is not the retailer's optimal decision if the product is out of stock. Fourthly, the retailer's optimal order quantity from quality reliable is positively correlative to defective rate and customer's penalty, and the retailer's optimal order quantity from quality unreliable is contrary. Lastly, the retailer's optimal order quantity is negatively correlative to the unit wholesale price and positively correlative to the unit retail price and unit shortage penalty cost.