Four Kinds Of Inventory Decisions Models For Online Supply Chain System

This paper address the challenge into dealing with the online supply chain system with four different styles that consist of traditional channel and E-channel by Internet, and study the decision behaviors of agents on supply chain under three representative operation settings according to the thoughts of progressive extension. By the principle-agent model under different information conditions, this paper try to find what the manufacturer, as the leader of Stackelberg game without the pricing power of retail channel, should do to inspire the retailer to make decision with single linear contract. our contributions are listed as follows(1) According to the four online supply chain systems with deterministic demand, we present the optimal inventory control and pricing decision scheme, and develop the optimal ordering quantity and the optimal selling prices of two channels with mathematical analytical expression. As an ideal market condition, this paper develops the optimal ordering quantity and the optimal selling prices with closed-form expression. It is shown that the optimal selling price in traditional channel is always higher than that in E-channel(forward integrating to an critical point in model 3); the optimal selling prices are the decreased function on price-demand elasticity and the selling costs of two channels(back integrating to an critical point in model 3), but increased function of selling costs.So, there are two approaches to improve the performance of whole system, one is to reduce the selling cost, and the other is to set the optimal selling prices by the price-demand elasticity. Further, base on numerical experiments, we can simulate the optimal joint decision of the four online channel supply chain systems. By comparison, we can find, with the market parameters the same, if the manufacturer and traditional retailer open E-channel with lower costs, the performance with partially centralized system is better than that one with completely independent of competition.(2) According to the four online supply chain systems with uncertain demand, under stochastic demand, with a certain distribution function, this paper present the optimal inventory control and pricing decision scheme with single linear contract for manufacturer to make choice between production/order excess and production/order shortage, and develop the optimal ordering quantity and the optimal selling prices with mathematical analytical expression. It is shown that it is very important for the agents on supply chain to pay more attentions to the channels information, and information-share will improve the system performance.Compared with deterministic demand, the mathematical analytical expression is very similar with that under stochastic demand situation. Based on numerical experiments, the optimal producing/ordering and pricing decision is not the same between these two different situations, when the market expectations of demand closing to maximum value. But compared with deterministic demand situation, the expected profit under stochastic demand is lower for a fixed value. This also reflects the reactions for the members of supply chain to risk.(3) According to four online supply chain system under asymmetric information (with demand elasticity uncertain), the single linear contract is applied to inspire the retailer to reveal his private information, and the optimal inventory controlling and pricing decisions are developed based on the setting that the manufacturer does not hold the pricing power of retail channel for four online supply chain systems, and the mathematical analytical expression is developed.It is shown that, the uncertainty of demand elasticity means greater uncertainty and higher risk. Manufacturer, as the leader of Stackelberg game, needs to consider more factors and make hard decisions. Based on the corresponding numerical results, it is shown that the manufacturer always make its decisions under the most pessimistic inform channel b1 H ,b2 Hand part or all of b1 ,b2 . b1 H ,b2 Hmainly reflect the p1 ,p2 determined by retailer, with b1 ,b2 the decision of pricing and producing/ordering under different channels. b1 H ,b2 Hreflect the market condition with pessimistic inform, it means greater uncertainty and harder decision making. b1 L ,b2 L reflect the market condition with optimistic information, it means smaller uncertainty an easier decision making. From numerical results, with b1 L ,b2 L, all the supply chain system have a higher optimal price, lower optimal inventory and higher expected profit. This indeed reflects that all the retailers have information welfare.