Ordering Strategy For Off-price Merchandise Under Cross-selling And Non-instantaneous Replenishment

With the development of economy and the impact of online shopping in recent years, competition in traditional retail has become more intense. Faced with such a strong opponent, retailers must adopt a variety of marketing techniques to improve their competitiveness in order to strive for greater market share and be in invincible position. As a marketing technique, selling off-price merchandises can attract customers patronize supermarkets and promote other merchandises' sales. Therefore, selecting the reasonable replenishment way and developing optimal merchandise joint ordering strategies have an important role in retailers' management decision.The inventory-related concepts and basic methods were elaborated. The literature search conclusions have been drew through analyzing the cross-selling, non-instantaneous replenishment, stochastic demand, fuzzy inventory and off-price merchandise related literature. In previous studies, a basic EOQ model for off-price merchandise under cross-selling and non-instantaneous replenishment has been generated. The existent condition of unique optimal solution has been obtained, correlative management inspirations have been analyzed and the effect of key parameters on ordering strategies has been analyzed by simulation. The extension of different replenishment rate has been considered and researched. Then, the off-price merchandises' demand subjects to uniformly distribution and two merchandises' cost parameters are fuzzy numbers have been further considered, the graded mean integration representation method has been used to represent the objective function, a EOQ model with cross-selling, random environment and non-instantaneous replenishment in fuzzy environment has been generated, the theoretical analysis and numerical simulation have been proceeded. It shows that: selling price and the ordering cycle length of off-price merchandise has the lower limiting value; the increase of demand related factors for the total average profit is conditional, the selling price of related merchandise must above a fixed value. In order to increase the overall average profit of two merchandises, replenishment rate of off-price merchandise during instock time should be reduced, only do this can avoid a large amount of inventory during the final stage and reduce inventory holding costs. Fuzzy production inventory model of off-price merchandise under random demand exist condition of unique optimal solution. The order quantity should be increased, instock and stockout time should be extended when the off-price merchandise demand rate is greater. The order quantity should be reduced, instock and stockout time should be shortened when the replenishment rate of off-price merchandise or related merchandise demand rate is greater.