Optimal Inventory Allocation Method Of Dual-channel Multi Echelon Distribution Network Based On Threshold Inventory Rationing Policy

After high-speed development of last ten years,online shopping has become a part of most people's life,and with the increment of post-80,90 netizens make further efforts of the development of e-commerce.According to the statistics,China's online retail market transactions accounted for 14.8% of total retail sales of social consumer goods at the first half of 2016,compared with 11.4% in the first half of 2015 which had an increase of up to 3.4%.The rapid development of e-commerce has seriously threatened the development of traditional retails,in the face of strong challenges of e-commerce and customer consumption habit change,traditional retailers developed their own online sales channels,created a new business model called ‘bricks-and-clicks'.The traditional retailers,especially those who has their own distribution network are going to face a more complex dual-channel multi-echelon distribution system compared to the single channel sales.So,those retailers should have more effective management methods to face this challenge.Furthermore,under the new business model retailers faced lots of challenges from different aspects,for example,how to coordinate the conflict between two channels and how to choose an effective inventory control policy between two channels.Particularly,inventory cost occupies a large proportion in the cost of the whole supply chain which determine the income,that inventory management is really important to every retailo rs.Aiming at the above problems,this paper aimed at finding the most suitable inventory management strategy with the best operation cost by considering with the characteristics of dual channel distribution enterprises and analyzing the supply chain system structure under dual-channel sales.This research takes a three level distribution system composed of central warehouse,distributor and retailer as the research object.According to the real situation and relevant academic research,assume that the distribution system is faced with two types of customer requirements which from e-commerce channel and offline channel and those demand process is independent Poisson process.In addition,the two types of customer has different profits to the enterprise,so it should be treated differently.The lead time composed of a constant transit time and a random waiting time caused by the out of stock from higher level.With all the assumptions,we established a multi echelon inventory allocation model based on threshold clearing mechanism,and extends the algorithm Federgruen proposed in 1993[66] to our solution.Finally,use MATLAB to simulate the model and contrast with the ‘separate stock(two-bin)' policy.Numerical result confirm that the model is very effective for the dual-channel multi-echelon distribution network.