engleski

Channel strategies and stocking policies in uncapacitated and capacitated supply chains

A supply chain consisting of a single supplier distributing 2 independent products through multiple retailers is analyzed. The supplier needs to incentivize its retailers to adopt stocking policies that are mutually advantageous and that result in the optimal level of market coverage. The focus is on determining the optimal stocking policies for retailers and the resulting distribution strategy given that the supplier has either unlimited or limited capacity. Results provide insights on the optimal distribution strategy and stocking policies for the supply chain. It is optimal for the supplier to use an intensive distribution strategy. Retailers hold larger stocks of a product which generates higher supplier margins but only when the supplier has unlimited capacity. If the supplier has limited capacity, then their margins have no effect on retailers' stocking decisions. Contrary to conventional wisdom, retailers hold larger stocks of a product that has less demand uncertainty as compared to one that has more demand uncertainty.

supply chain ; distribution channels ; game theory ; supliers ; retailers

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