Optimization Research On Retailer Profit Considering Consumer Strategic Behavior

This paper aimed to research how dealers make sales operation decision while their customer comes with strategic behavior. In order to maximum the profit of product sales, we analyze consumer behavior with consumer expectation theory and develop profit model with the classical newsvendor model in supply chain management. This model considered how consumer value products impacting by discount factor and treat risks(risk preference) as independent variables. Put the unit cost of the product and sale prices as exogenous variables. And use the optimization of product inventory and pricing as decision variables.We suppose that dealers could satisfy consumer’s need of product using the principle of rational expectations as a premise in this paper. So we could figure out the best dealer sales decision under strategic behavior. Then by comparing the profit outcome whether under consumer strategy or not, we could analyze the influence to profit by this kind of strategy and double check the result by fitting test. Our test results that consumer’s strategic behavior could force dealers to reduce their products’ price and inventory balance then narrow down the profit margin. And profit margin will also be narrowed down by the increase of discount factor and consumer’s risk preference.Then, we turned to analyze whether limited supply strategy could reduce the impact to profit by consumer’s strategic behavior.We figured out that limited supply strategy doesn’t complete elimination to negative effects but better in rising profit than not using this strategy. We used the numerical simulation to verify the conclusion and correctness, and fitted the dealer’s optimal sales operation decision under certain variable assignment.The consumer strategy behavior is intensively analyzed in this paper. We explained the decision making process of the strategy purchase behavior in line with the actual. This paper provided rational and useful way to optimize sales operation decision while facing consumer strategic behavior.