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Inventory and Service Strategy of Dual-channel Supply Chains

Author: YanYan
Tutor: LiLi
School: Nanjing University of Technology and Engineering
Course: Information Science
Keywords: Supply Chain Management Two-echelon Channels Inventory Strategy Service Strategy
CLC: F274
Type: Master's thesis
Year: 2010
Downloads: 255
Quote: 2
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Abstract


With the rapid development of E-Commerce, as a sales channel, the Internet has been adopted by more and more business enterprises. It can reduce costs and increase market share. On the one hand the Internet channel is different from traditional channel in characteristics, on the other hand as manufacturers and retailers belong to different independent entities in supply chain, once the manufacturers add the Internet channel, it will inevitably lead to the competitions and conflicts between manufacturers and retail merchants, which will reduce the performance of the supply chain system and damage the member’s benefits. For that reason, the article studied the inventory and service policy of two-echelon dual-channel supply chains combined by manufacturer with Internet channel and retailer with traditional channel, and we set up a quantitative mode of the dual-channel supply chains inventory and services with optimality analysis, regarding different market parameter, and programming and computing with Fortran and imitating with Matlab. We found that the conclusion agree with the practice of management, and the paper mainly manifests in the following aspects:First, we set up a quantitative mode of the dual-channel supply chains inventory with the demand uncertainty under three kinds of inventory management mode:manufacturers and retailers holding inventories both, manufacturers managing inventories and retailers managing inventories, in which we innovatively added the degrees of preference on Internet channel. Through imitating and comparing the optimal inventory and profit under the tree modes, we found that centralized management was relatively superior to decentralized management. At the same time, the search also showed that with higher degrees of preference on Internet channel, only manufacturers’income increased while retailers and the whole supply chain’s benefits were all damaged.Secondly, we set up a mode of the dual-channel supply in which manufacturers outsourced the Internet channel to retailers. In this mode, there were two patterns of control: decentralized control and centralized control. Through imitating the impact of the service level of different channels in the two patterns to manufacturers, retailers and supply chain profits and price, we found that price was positively correlated to the respective channel; as different service costs, the profit trend was also different in decentralized control and centralized control. At the same time, the research also revealed that:when manufacturers outsourced the Internet channel to retailers to accomplish, they should reduce the marginal cost of services of Internet channel and choose retailers with lower marginal service costs. In summary, we found that manufacturers with Internet channel and retailers with traditional channel composed the dual-channel supply chain and that the profit of whole supply chain in centralized mode was superior to that in decentralized mode.

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