Research On Supply Chain Decision Under The Mode Of Drop-Shipping Based On Free Shipping Quantity

With the development of e-commence, the drop-shipping mode is presented in the supply chain competition. Under this mode, the commodities which online retailer has purchased are kept in the supplier's inventory. When the order comes, the supplier is informed to deliver. In order to stimulate the online retailer to place a big order, the supplier stipulates the minimum free drop-shipping fee quantity. Therefore, how to make a decision becomes a theoretical and practical problem. This thesis considers the circumstance that supplier provides free drop-shipping service and the online retailer executes marketing efforts, studies the decisions made by supplier and the online retailer, and then compares with the profits under the traditional mode. The main content and the results as follows:(1) Analyzing the condition when supplier absorbs the drop-shipping fee, and making the optimal free drop-shipping quantity decision under certain demand. Meanwhile, analyzing the online retailer's pricing and marketing effort level decision. The result shows that supplier prefers to provide this service to those commodities whose drop-shipping fee is low or price sensitive coefficient is high. The retailer reduces the price and improves the marketing effort level to meet supplier's requirement. What's more, the profits under the drop-shipping mode is higher than traditional modes.(2) Analyzing the condition when supplier absorbs the drop-shipping fee, and making the optimal free drop-shipping quantity decision under stochastic demand. Meanwhile, analyzing the online retailer's ordering and marketing effort level decision. The result shows that supplier prefers to provide this service to those commodities whose drop-shipping fee and retail price are both low. The online retailer improves the marketing effort level to meet supplier's requirement. What's more, the profits under the drop-shipping mode is higher than traditional modes.