Analysis Influence Of Substitutability On Inventory Management And Control In Supply Chain

Supply substitutability offers the consumers more choices in case of stock-outs,thus minimizing the loss on the part of the retailer and improving the consumer's satisfaction.Therefore,in predicting the demand of products and deciding the optimal inventory policy,we must take into account the substitutability of similar products.In recent years,researches on the inventory model of the substitutable products have aroused the interests of a lot of domestic and foreign seholars and have gradually become a hot spot in the respect of supply chain stock management.Firstly,basing on the fuzzy theory,combining of the method of sending questionnaire, this paper determined the complexity of substitutability between products by taking the characteristics of people and the prices,function,quality of products into account.Secondly,In order to investigate the substitutability impacting on the manegement of inventry, one retailer model firstly is constructed and then these scop of reseacrh adout substiutte porducts is exetnded to the two-levels supply chain containing one retailer and one supllier. In the objective function,the penalty cost caused by product because of the occupancy of fund is considered into the cost of inventory holding.Models without substitution and models with substitution, which compared with each other then in inventory control parameters,service levels,profit levels and finance are simulated with automod software from low and high penalty cost perspectives.And then it finds out the penalty cost,the weightings of prices,function,quality of products how to influence the policy, service levels,profit levels and finance of system.In the end,it summarizes the conclusions that the parameters required to tune and the direction they are tuned to depand on the penalty cost and whether they belonging to retailer or supplier,but the degrees they adjusted are related to the weightings of prices,function,quality of products.All in all,the existence of substitution,making the system access to a very high sevice level which even up to 99.9% and basing on little holding cost. By the sensitivity analysis of weight, the more the high-end pruduct substitute as others,the more profit the system will gain,but it does not allways better to the system.