Analysis of the Optimal Threshold Policy of the E-Tailer with Mixture Strategy in E-Fulfillment

Yuepeng Cheng, Bo Li and Zhenhong Li
Additional contact information
Yuepeng Cheng: College of Management and Economics, Tianjin University, Tianjin, China & College of Computer and Remote Sensing Information Technology, North China Institute of Aerospace Engineering, Langfang, China
Bo Li: College of Management and Economics, Tianjin University, Tianjin, China
Zhenhong Li: College of Management and Economics, Tianjin University, Tianjin, China

International Journal of Information Systems and Supply Chain Management (IJISSCM), 2016, vol. 9, issue 2, 21-34

Abstract: This study considers a supply chain consisting of a supplier and an e-tailer on the internet. The e-tailer replenishes products from the supplier for private inventory and sends drop shipping requests to him for delivering orders to customers when private inventory is insufficient or stock out, whereas the supplier provides drop shipping service with a limited ability for the e-tailer. This paper proposes an algorithm to simulate the scheduling sequences of the e-tailer with the optimal threshold policy and mixture strategy in every scheduling unit and obtains the optimal threshold of private inventory for the e-tailer to achieve average profit maximization. The impacts of mixture of demand and lead time uncertainty are examined. The influence of high priority demand variability on the optimal threshold policy in two complex scenarios are also considered in this study. These results have an important guiding significance for the e-tailer who adopts the mixture strategy in e-fulfillment under complex operating environments.

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://services.igi-global.com/resolvedoi/resolve. ... 8/IJISSCM.2016040102 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:igg:jisscm:v:9:y:2016:i:2:p:21-34

Access Statistics for this article

International Journal of Information Systems and Supply Chain Management (IJISSCM) is currently edited by John Wang

More articles in International Journal of Information Systems and Supply Chain Management (IJISSCM) from IGI Global
Bibliographic data for series maintained by Journal Editor ().