Strategic Inventory And System Coordination Of Retailers In Multi Cycle Durable Goods Supply Chain

In the modern business environment,the competition between enterprises is not only limited to individuals,and the competition between supply chains has attracted more and more attention.The more efficiently and stablely can the supply chain provide services to the market,the more firmly it can occupy the market share,thus gaining market dominance.However,with the competition between supply chains is in full swing,the checks and balances between upstream and downstream supply chains are gradually emerging.Strategic inventory as a common bargaining tool is favored by retailers,so the impact of strategic inventory strategy on the overall supply chain is more worthy of research.At the same time,with the impact of durability on the market becoming more and more obvious,it is particularly necessary to study the strategic inventory strategy under the durable goods supply chain.In this paper,we present a two-level supply chain model with one supplier and one retailer in the two cycle,which are supply chain without durability and durable goods supply chain.By analyzing the Stackelberg game among the main bodies of the supply chain and finding the Subgame Perfect Nash Equilibrium,this paper studies the application of strategic inventory strategy in different types of supply chain and its impact on the decision-making of the main bodies of the supply chain relative to the zero inventory strategy.From our research,we found that:In the supply chain without durability,because the decentralized supply chain has the characteristics of channel conflict,the overall benefit of the decentralized supply chain under the zero inventory strategy will decrease greatly compared with the centralized supply chain.The main reason for the channel conflict is that in the decentralized supply chain,the supplier will excessively raise the wholesale price when making the pricing decision,so that the sales price is too high and the purchase volume of downstream is insufficient,and the overall benefit of the supply chain will decay.If the inventory cost can keep at a reasonable level,the retailer’s strategic inventory strategy can effectively improve itself bargaining power,so as to reduce the average wholesale price and sales price and improve the overall sales volume in two periods of the supply chain.As a result,retailers’ profits have been improved,and the channel conflicts have been also effectively alleviated with supply chain achieving Pareto improvement.In contrast,when the inventory cost is too high,the retailer’s strategic inventory strategy can always bring the supplier higher profits than the zero inventory strategy.However,for retailers,the strategic inventory will form a "strategic burden",so that their profits will fall below zero inventory strategy because of the adoption of strategic inventory strategy.In the durable goods supply chain,when the retailer adopts the zero inventory strategy,because the decision-making of the main body of the supply chain has the aftereffect in the first period,the two-period decision-making of the main body in the durable goods supply chain will be more complex compared with the supply chain without durability.And when the durability is in a certain range,with the increasing of the durability,the profits of the corresponding retailers will continue to shrink.When retailers adopt the strategy of strategic inventory,the increase of durability will make the conditions of purchasing strategic inventory more stringent,and the optimal level of strategic inventory will decline.For retailers,it seems that with the growth of the durability,the application scenarios of strategic inventory strategy is shrinking,but in fact,it is not.It is found that as long as the durability is not very low,the strategic inventory strategy can always improve the bargaining power and bring benefits beyond the zero inventory strategy for retailer.At the same time,the possibility of strategic inventory becoming "strategic burden" is eliminated,so that the strategic inventory strategy is always the optimal strategy.And the bargaining power given by strategic inventory strategy will gradually become obvious with the increase of durability.After that,the correctness of the conclusion is verified by example analysis.