Dual - Channel Ordering And Pricing Model For Sharing Surplus Inventory Under Independent Stochastic Demand

Nowadays, more and more retailers in order to adapt to the rapid development of e-commerce, in addition of establishing traditional channel, also exploit the electronic channel. For example, Sunning has adopted a double channel strategy. In general, considering in a retailer’s double channels which face independent and stochastic demands, it will set up two different and independent departments or subsidiary are responsible for the operation decision of the two channels. The product ordering and pricing are one of the most important decisions for enterprise. When there is uncertainty about the market demand, the number of orders and pricing have a direct impact on the benefit of the channel. There is possible have surplus inventory and shortages for two channels. If there is out of stock and customers are willing to wait for, so the retailers can be horizontal transfer from another sales channel. It is the double channels of remaining inventory sharing.Therefore, this paper reaches the problem that sharing leftovers the same for a two-channel retailers, using the application of game theory to study the theory of two-channel shared or not ordering inventory and pricing decisions and strategies of the two cases. Significance of this study are the following two aspects:in theory, this paper focuses on the sharing leftovers from the perspective of shared dual channel retailers ordering studies at random from independent requirements affect prices and demand in the order random by an independent and under the influence of price pricing study, explore new dual-channel inventory management strategy, enrich our inventory management system theory; in practice, this paper is about the same dual-channel retailers sharing leftovers of research, on the one hand to improve their inventory management decision-making retail business has an important reference value, on the other hand to carry out the dual retail channel business has a certain significance. The main contents include the following aspects.Firstly, considering in a retailer’s double channels which face independent and stochastic demands, provided that a channel is stock out at the end of the selling season, it can share the other channels’ leftovers. In this paper, the two channels’ ordering decision problem is studied, the double channels’ ordering models with sharing leftovers and not are established respectively. Based on Nash game theory, the equilibrium condition of optimal ordering quantity is given under sharing leftovers. This study shows that the optimal ordering quantity of the two channels with sharing leftovers are lower than that of not sharing leftovers with the demand distribution function satisfying certain condition, the optimal profit of the two channels with sharing leftovers are higher than that not sharing leftovers. At last, the numerical simulation results show the effectiveness and reliability of the models.Secondly, on the basis of the previous reached, the two channels’ordering and pricing decision problem is studied, the double channels’ordering and pricing models with sharing leftovers and not are established respectively. Based on Nash game theory, the equilibrium condition of optimal ordering quantity and pricing are given under sharing leftovers. At last, the numerical simulation results show the effectiveness and reliability of the models.Finally, based on the above research results, provide for our retail inventory management level dual-channel and dual-channel business to carry out some theories and recommendations on the practice, and points out the shortcomings and limitations of the study, which as a prospect for future research trends.