A Study On The Ordering Policy For Fashion Products Considering Advertising Effect

Fashion products market is lucrative and competitive because of its characteristics. It occupies an important position in the distribution of the markets in China. Elements such as seasonal climate, consumer preferences and fashion cycle have great influences on the fashion products. So the demand of fashion products is difficult to accurately predict, which lead to that retailers cannot make the valid ordering policy. Order in large quantities may cause the product backlog and loss of profits. Retailers will be subjected to stock insufficient if the order quantity is too small to meet the demand of market. Advertising is an important factor which affects the demand of fashion products, but there are few studies in this issue. Currently, we can feel that advertising has been common in people’s daily life, influencing people’s consumption trends and introducing new products to everyone. The most important point is that advertising promotes requirements greatly.By studying and summarizing existing domestic and foreign research, we can find that the demand for fashion products is influenced by sales price. This paper uses the theory of price decline in stages to reflect the fashion products’immaterial deterioration, then establishes the order policy model for fashion products whose sale price affects demand. Furthermore, add the influences of advertising influence to the demand and build a decentralized and centralized decision making model, compute the optimal order policy in maximum profit and least advertising expenditure in each case. At the end of the paper, we give the specific values to those models, and make sensitivity analysis of main parameters, summarize influences on each optimal order policy by each parameter, educe some theoretical advices to reduce the risk for retailers.