| Motivated by the common practice that physical retailers such as “bricks andmortar†want to increase their sales or market share, they plan to build the on-linechannel which is the better ways during the information technology era. So under thetwo channel strategy, then they will meet two problems: the first problem is thatwhether the online channel uses its own stock or shares stock with the physical storeto fulfill the demand from the online channel. The second problem is how to solve thechannel conflicts between physical and online channels as the price of online usuallyis lower than physical store which may influence the demand of physical store. Forthe first problem, intuitively sharing the inventory with physical channel is betterbecause of the inventory pooling effect, so the paper also evaluate the the inventorypooling effect. For the second problem, intuitively the dynamic pricing can makebetter results, because the dynamic process can adapt the price to the inventory leveland the left time.For these reasons, this paper compares the two scenarios that weather share thestock with physical channel to solve the first problem; furthermore the paper analyzesthe inventory pooling effect. And also brings the dynamic pricing strategy to solve thechannel conflicts on the base of previous research on dynamic stock admissionpolicies. Finally, the paper makes the retailer gain the better results which has greatpractical significance. |
