A Replenishment Model of Dual Sales Channels with Lateral Transshipment Problem Considering Consumer Behavior

Abstract

We study a replenishment model that the retailer shares his leftovers on his direct online sales channel and traditional retail channel. When one of the sales channels is out of stock and another has leftovers, the latter shares its leftovers with the former. Commonly, there is competition between two channels. Therefore, we take the consumers’ behavior including retailer inconvenience cost of traditional retail channel, and risks and delivery lead time of direct online sales channel into consideration. Then, we use the function of consumer utility to measure the Demand distribution function. Furthermore, the optimal reple nish ment models in independent decision-making and in lateral transshipmen t are established separately. Then the results of two models are compared by order quantity and retailer’s profit. What’s more, it is found that lateral transship ment between dual sales channel inventory can reduce the order quantity and in crease the retailer’s profit when the prices and demand distribution satisfy certain condi tions. Finally, the numerical analysis of the model is carried out. The validity of the research results is proved by examples.