Study On Supply Chain Stocking Decision In Hybrid Distribution

Development and application of information technology has begun to change the distribution model of the world. More and more manufacturers have paid attention to distributing their products to the end consumer through the independent retailers as well as through their direct channels. Supply chain distribution system is gradually changing from the traditional retail distribution to the hybrid distribution system of the co-existence of traditional retail channel and on-line direct channel. And the relationship between retailer and manufacturer is becoming not only cooperation but also competition. In addition, the faster product replacement speed and the shorter product life cycles mention higher requirements to the supply chain inventory.The paper takes newsvendor model to analyze stocking decisions made in hybrid distribution systems comprised of one retailer and one manufacturer for short-life-cycle products. The study has the following two aspects:Firstly, the thesis analyzes stocking decisions in decentralized supply chain using a game theoretical framework with those under buy-back contract and not. The retailer is the Stackelberg leader of the game and places an order first. After receiving the retailer's order, the manufacturer will determine the production quantity and inventory allocation between her direct channel and the retailer's channel. The newsvendor model is for solving optimization problems. Through the numerical experiment we draw the conclusion as follows:The diminution in wholesale prices will lead to a decline in profit of manufacturer but the profit of retailer is not increasing as the wholesale prices decrease; When the demand for commodities is less sure, the income of supply chain and its members is less.Secondly, this part analyzes supply chain coordination under buy-back contract and not, decentralized and centralized inventory control strategies and two different game theoretical frameworks. Through the numerical experiment we draw the conclusion as follows:The higher the level of cooperation, the more it can improve supply chain performance; The buy-back contract can make Pareto improvement for the whole supply chain; That all price returns all to manufacturer can ensure maximum coordination; Buy-back contract provide a way to eliminate the "Double Marginalization".