Research On Inventory Strategy Of Small And Micro Retailer In Remote Areas

In the past few years, how to support the development of enterprises in remote areas and small-micro enterprises attracted more and more attention from all sectors of society. However, due to the lack of funds, personnel and technical support, the small and micro retailers in remote area unable to formulate rational and effective inventory control strategy, which leads to the problem that the inventory cost can’t be controlled at any time is difficult to be solved effectively. At the same time, as the small and micro retailer is located in a geographically disadvantageous remote location or in the supply chain where the supplier is strategically dominant compared to the retailer, the supplier can be the one deciding when she should replenish the retailer’s inventories. Thus, it is possible that the replenishment periods are of a stochastic length, and the retailer can’t be timely on the inventory replenishment, which leads to the existence of a large number of retailers merchandise inventory backlog or backlogging, resulting in a serious waste of resources and loss of customers.Based on the theory of inventory control and review of domestic and foreign relevant theory, three studies have been developed under the situation that the retailers in remote area and small retail enterprises should decide how much to increase their inventory level considering the stochastic replenishment interval, stock-dependent selling rate, partial backlogging and deterioration in the process of merchandise sales in this paper.First, the optimal inventory control model of the retailers in remote area and small retail enterprises for general item with stock-dependent selling rate, stochastic replenishment interval and shortages are allowed in the term of partial backlogging been generated. In the setting under general distribution between replenishment interval, the necessary and sufficient conditions of the existence and uniqueness of the optimal solutions is provided and closed form solutions are obtained. Furthermore, a procedure is also developed to determine the optimal solution for the proposed models and the meaning of economic management are analyzed. At last, the convexity condition of the model which the replenishment interval is assumed to obey from two different distributions, namely, exponential and uniform distributions is discussed and closed form solutions are proposed and a numerical example and key parameters’ sensitivity are shown to illuminate the presented model. It is shown that the selling price, stock-dependent selling rate factor and stochastic replenishment interval influence on retailers’inventory strategy and average expected profit than that of other factors.Second, based on the study of general merchandise, an inventory control model of the retailers in remote area and small retail enterprises for deterioration items been generated that considering the deterioration phenomena exist in the process of commodity selling. Also, the existence of the optimal solution, solution procedure and numerical examples are analyzed. Then the key parameters sensitive analysis is carried out when the replenishment interval is assumed to obey from two different distributions, namely, exponential and uniform distributions. And the result shows that the stock-dependent selling rate factor, partial backlogging factor, stochastic replenishment interval, deterioration rate and selling price have a greater influence on ordering strategy, but the selling price, stock-dependent selling rate factor, deterioration rate and stochastic replenishment interval influence on retailers’inventory strategy and average expected profit than that of other factors.Finally, we have summarized the inventory control strategy of small and micro retailer in remote areas and given the possible issues being solved in the future. At the same time, further works in seismic research are prospected.