The Study On The Problem Of Pricing/Inventory Joint Decisions For A Distribution System In Apparel Industry

Supply chain management theory is taking shape in the groping and summarizing the enterprises management practices and has become an important management mode for the enterprises. With growing focus on supply chain management, firms realize that inventories across the entire supply chain can be more efficiently managed through greater cooperation and better coordination. Although some of national apparel enterprises has begun to apply supply chain inventory management method step by step. In actually, there are plenty of situation do not suit to apply supply chain inventory management method in apparel industries. In the field of supply chain management of apparel industry, inventory management is an important topic of interest to many practicers and researchers. The stock level not only influences the integrated logistics costs, but also restricts the performance of the whole supply chain. Simultaneously, price is an effective and favorite mechanism of competitors. When the final demand of customers is affected by pricing, each member's inventory decision is also influenced correspondingly. So the study on the problem of pricing /inventory joint decisions for a distribution system in apparel industry has important academic and actual significance.In most of the literature on the problem of pricing/inventory joint decisions, demand with price-elasticity is a common assumption and based on it to maximize the whole supply chain profits and expected the vertical coordination between supply chain members or competition about market share. But studying on this problem in apparel industry is only concentrated on pricing, return policy and price discount. Research on batch-wise price discount sales of fashion apparel is rare. Especially, the distance between profits (costs) optimization problems and management practices is very large, and it is urgent to study hard to guide the supply chain practices in apparel industry of our country.This paper takes apparel industry as the research background and chooses a kind of brand products as the research object. It summarizes the abroad and domestic literatures on pricing/inventory joint decisions. With the aid of supply chain management correlative knowledge, it applied Probability, Operational Research and Optimization methods to focus on establishing profit optimization models for one-to-one and lot-to-lot distribution system on pricing/inventory joint decisions problem. The paper may provide decision reference and quantitative support to apparel industry of our country on pricing/inventory joint decisions.The main contributions of this paper are as follows:1.Considering the circumstance of batch-wise price discount sales in apparel industry and this considering is rarely found in abroad and national research.2. The distribution system with one manufacturer and one retail store is considered. Under demand with price elasticity, the total profit functions for the manufacturer and the retail door are given respectively. Then the profit optimization models on pricing/inventory joint decisions for this distribution system are established based on them.3. Extending one-to-one distribution system to the distribution system formed by one central distribution center, two regional distribution centers and multi-retail stores, and the distribution between the central distribution and the regional distribution centers is also considered, the total profit functions for the manufacturer and the sales regions are given respectively. Then the profit optimization models on pricing/inventory joint decisions for this distribution system are established based on them respectively.In the end, the whole article is summarized and further research directions are shown.