The Optimal Ordering Strategy Research Of Products Based On Cross-selling Effect

The rapid development of data mining technology makes it possible to obtain valid information from transaction data,such as finding the cross-selling products through association rule mining techniques.New retail enterprises not only focus on differentiation strategy of similar products with substitutability,but also look further into the joint replenishment decisions of the associated products which could promote sales of each other.In addition,the rapid development of the global economy has resulted in the fact that the competition of enterprises is no longer between individual enterprises,vertical integration of the whole supply chain instead.Therefore,it is very important for the retailers and suppliers to develop the ordering strategies and supply chain's coordination strategies for the associated products.This paper describes the associated demand of cross-selling products through the cross-selling coefficient,focuses on the two products of one-way cross-selling,and discusses the ordering problems and value promotion strategies of such products from the perspective of individual retailer.On the other hand,it extends to the secondary supply chain that includes retailer and supplier to pursue the ordering strategy of the cross-selling products with maximizing the revenue based on buy-back contract.Under the framework of ordering model with two products based on one-way cross-selling,this paper has systematically studied the preliminary ordering decision problem of one-way cross-selling products,respectively through the newsvendor model and leader-follower game by using numerical analysis,optimization techniques,sensitivity analysis and corresponding comparative analysis,etc.Some main results are summarized as follows:the results of numerical example show that the newsvendor model is effective,and for the individual retailer,the expected revenue could be improved by setting a lower promotion price of the minor item under the condition that the major item is out of stock.The buy-back contract can effectively coordinate the overall benefit and increase the total expected revenue of the secondary supply chain.In the cross-selling combination,if the cross-selling coefficient increases,the retailer should increase the order quantity of the minor item,reduce the order quantity of the major item,and the supplier should lower the repurchase price of the two products.