Apparel Supply Chain Coordination Based On RFID And Replenishment Strategy Optimization

Since the1990s, radio frequency identification technology has entered our daily life gradually. Nowadays, with the rapid development of information technology, RFID has been applied in many industries. RFID technology also becomes the most powerful boost of apparel enterprises. With the global economic integration, competition among enterprises is gradually transformed into the competition between supply chains. It becomes a hot and difficult field of study to design a contract to make each node in the supply chain enterprises reach win-win situation. Therefore, it has great significance to discuss the implementation of RFID in the supply chain and the impact of the development of the corresponding coordination contract.In recent years,"fast fashion" apparel retail brands such as ZARA, C&A, UNIQLO, H&M, GAP, etc. emerged in China. These retail brands set ordinary consumer as target consumer groups. Fast fashion supply chain has many non-quantitative factors, such as the constant introduction of new products, the ever-changing trends and highly vertically integrated suppliers, manufacturers and retailers. Few scholars do quantitative analysis and research of fast fashion supply chain. But fast fashion retail retailers still need to identify the different categories of products in various stages of its order number in order to obtain higher returns. Thus, it has great significance for retailers to develop order quantity for different products at different stages.Under the premise of the RFID, this paper develops coordination mechanism of apparel supply chain, discusses the impact of RFID on supply chain coordination and risk impact and studies fast fashion retailer supply chain optimization replenishment policy. Specific works are as follows:(1) Research and analyze a two-stage supply chain which includes one supplier and multi-retailers based on newsboy model and VMI (Vendor Managed Inventory) model. Customer demands are affected by the price made by retailer. Discuss the supply chain benefits and risks in case of whether to implement RFID technology. At the same time, develop and analyze coordination contract. Through centralized and decentralized decision-making of supply chain, develop a supply chain coordination contract which combines cost-sharing contract with repo contract. Through analysis, the price of RFID tags will affect the expected return and risk of the supply chain. Big shelf space of RFID system plays an important role of reducing the uncertainty of supply chain income. The increase of replenishment cycle can reduce supply chain risk if the price of RFID tags is very small. The supplier can not only reduce the risk, but also promote supply chain coordination in the condition that the supplier shares most of the cost of RFID tags actively. Meanwhile, for the supply chain implemented RFID technology, suppliers can achieve supply chain coordination through setting up a smaller buyback factor than the supply chain not implemented RFID under the appropriate cost-sharing coefficient.(2) Through the modeling of fast fashion supply chain replenishment and customer merchandise selection and purchase process, optimize the replenishment strategies of fast fashion retailers. Customers choose dynamically from the available fashion styles according to a utility maximization criterion. To formulate the ever-obsolescing fashion trends, a declined factor is defined to represent the fading attraction of old styles. A hybrid heuristic algorithm, simulated annealing compounded with an estimated gradient is proposed to address the retailer’s profit maximization problem. According to the simulation results, the fast fashion supply chain was found to be profitable based on the facts that (ⅰ) retailers should continuously sell new styles and replenish the product in small quantities; and (ⅱ) retailers should supply a wide variety of product styles if the products are highly fashionable.