Abstract
Consumer’s uncertain return behavior has brought great challenges to dual-channel retailers’ order decisions. Based on consumers return behavior and random market demand, this paper establishes newsboy models under independent operation strategy and inventory sharing strategy, and studies the optimal order decisions of dual channels. Then by comparing the optimal results under different strategies, the optimal strategy of the dual-channel retailer is determined. Eventually, dual-channel return rates effects on channels are discussed. The results show that (1) The inventory sharing strategy is better in terms of minimum order quantities or maximum profits; (2) When the return rate of one channel remains constant, a certain channels return rate hurts its own order quantity. When the return rate of one channel increases, a certain channels return rate does not always hinder the increase of its own order quantity; (3) The profit of a certain channel is more easily affected by its return rate, and the condition where it earns profits becomes more stringent with the increase of another channels return rate.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Dan, B., He, Q., et al.: Ordering and pricing model of retailers preventive transshipment dominated by manufacturer with conditional return. Comput. Ind. Eng. 100, 24–33 (2016)
Dan, B., He, Q., Li, Y.: Decision-making model of preventive lateral transshipment and ordering for perishable product in multi periods. J. Ind. Eng. Eng. Manag. 31, 133–141 (2017)
Zhang, A.F., Jing, Y.G.: Joint replenishment and pricing model of dual channels with sharing leftovers under independent and stochastic demand. Ind. Eng. Manag. 24(1), 45–53 (2019)
Feng, P., Wu, F., et al.: The order and transshipment decisions in a two-location inventory system with demand forecast updates. Comput. Ind. Eng. 135, 53–66 (2019)
Fu, K., Gong, X., Liang, G.: Managing perishable inventory systems with product returns and remanufacturing. Prod. Oper. Manag. 28(6), 1366–1386 (2019)
Goyal, S.K., Cárdenas-Barrón, L.E.: Note on: economic production quantity model for items with imperfect quality-a practical approach. Int. J. Prod. Econ. 77(1), 85–87 (2002)
Yu, C.H.: CNNIC releases “the 45th statistical report on internet development in China. Civ.-Mil. Integr. Cyberspace 5, 26–27 (2020)
Fan, S.J., Wang, X.P.: The beautification strategy of information disclosure based on the optimization of pricing and ordering considering consumer returns. Chin. J. Manag. Sci. 27(3), 116–127 (2019)
Mao, K., Fu, K., Xu, J.Y.: Probabilistic selling with money back guarantees. Syst. Eng.-Theory Pract. 40(4), 964–977 (2020)
Liu, L., Li, Y.J.: The implementation strategy of inventory sharing in competitive sales market. Syst. Eng.-Theory Pract. 39(3), 635–646 (2019)
Letizia, P., Pourakbar, M., Harrison, T.: The impact of consumer returns on the multichannel sales strategies of manufacturers. Prod. Oper. Manag. 27(2), 323–349 (2018)
Li, Q.X., Zhang, Q., et al.: Optimal inventory model with completely returning defective items. Chin. J. Manag. Sci. 6 (2009)
Li, S., Chen, K.Y.: The commitment conundrum of inventory sharing. Prod. Oper. Manag. 29(2), 353–370 (2020)
Liang, C., Sethi, S.P., et al.: Inventory sharing with transshipment: impacts of demand distribution shapes and setup costs. Prod. Oper. Manag. 23(10), 1779–1794 (2014)
Liu, J., Xiao, T., et al.: Ordering and returns handling decisions and coordination in a supply chain with demand uncertainty. Int. Trans. Oper. Res. 27(2), 1033–1057 (2020)
Shi, J., Xiao, T.: Service investment and consumer returns policy in a vendor-managed inventory supply chain. J. Indu. Manag. Optim. 11(2), 439 (2015)
Shi, J., Xiao, T.: Store assistance and coordination of supply chains facing consumer’s return. J. Ind. Manag. Optim. 12(3), 991 (2016)
Spiliotopoulou, E., Donohue, K., et al.: Managing and reallocating inventory across two markets with local information. Eur. J. Oper. Res. 266(2), 531–542 (2018)
Zhang, T., Gang, L.I., et al.: Online product information disclosure strategies with false failure returns. Oper. Res. Manag. Sci. 26(3), 123–230 (2017)
Torabi, S., Hassini, E., Jeihoonian, M.: Fulfillment source allocation, inventory transshipment, and customer order transfer in e-tailing. Transp. Res. Part E: Logist. Transp. Rev. 79, 128–144 (2015)
Gong, W.W., Li, M., Nai, H.: Research on resale channel selection of returned products based on strategic consumers. Soft Sci. 33(1), 98–103 (2019)
Wan, X., Li, D., et al.: Managing customer returns strategy with the option of selling returned products. Int. J. Prod. Econ. 230(107), 794 (2020)
Xu, G.: Optimal ordering and transshipment price decision for dual channel retailers under sharing inventory. Ind. Eng. Manag. 25(1), 110–117+126
Yang, J., Zhang, X., et al.: Cooperative inventory strategy in a dual-channel supply chain with transshipment consideration. Int. J. Simul. Model. 15, 365–376 (2016)
Acknowledgements
The funding supports from the National Natural Fund Project (71871150); the Innovation Spark Project Library of Sichuan University (2018hhs-35).
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this paper
Cite this paper
Wan, K., Guo, C. (2021). Research on Order Strategy Considering Consumer’s Return Behavior Under Inventory Sharing. In: Xu, J., García Márquez, F.P., Ali Hassan, M.H., Duca, G., Hajiyev, A., Altiparmak, F. (eds) Proceedings of the Fifteenth International Conference on Management Science and Engineering Management. ICMSEM 2021. Lecture Notes on Data Engineering and Communications Technologies, vol 79. Springer, Cham. https://doi.org/10.1007/978-3-030-79206-0_50
Download citation
DOI: https://doi.org/10.1007/978-3-030-79206-0_50
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-79205-3
Online ISBN: 978-3-030-79206-0
eBook Packages: Intelligent Technologies and RoboticsIntelligent Technologies and Robotics (R0)