The value of virtual pooling in dual sales channel supply chains
Recently the most significant growth in online retailing has been attributed to traditional offline retailers extending their brands online. Unfortunately, there is little research addressing the value of better information in retail/e-tail organizations. To fill this gap, this paper examines how investing in the continuous monitoring of online demands and inventory positions can provide economic benefit for companies that handle both in-store and online sales. Specifically, we develop and evaluate two dynamic assignment policies that incorporate real time information to specify which of a firm's e-fulfillment locations will handle each of its Internet sales. Computational results indicate that investing in dynamic assignment capability can reduce system cost (holding, backorder, and transportation) by as much as 8.2% over the optimal static policy. The percentage of sales occurring online plays a critical role in determining the magnitude of the benefit.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Diks, E. B. & de Kok, A. G., 1996. "Controlling a divergent 2-echelon network with transshipments using the consistent appropriate share rationing policy," International Journal of Production Economics, Elsevier, vol. 45(1-3), pages 369-379, August.
- Bendoly, Elliot & Blocher, Doug & Bretthauer, Kurt M. & Venkataramanan, M.A., 2007. "Service and cost benefits through clicks-and-mortar integration: Implications for the centralization/decentralization debate," European Journal of Operational Research, Elsevier, vol. 180(1), pages 426-442, July.
- Hau L. Lee, 1987. "A Multi-Echelon Inventory Model for Repairable Items with Emergency Lateral Transshipments," Management Science, INFORMS, vol. 33(10), pages 1302-1316, October.
- Alptekinoglu, Aydin & Tang, Christopher S., 2005. "A model for analyzing multi-channel distribution systems," European Journal of Operational Research, Elsevier, vol. 163(3), pages 802-824, June.
- Evers, Philip T., 2001. "Heuristics for assessing emergency transshipments," European Journal of Operational Research, Elsevier, vol. 129(2), pages 311-316, March.
- Patrik Alfredsson & Jos Verrijdt, 1999. "Modeling Emergency Supply Flexibility in a Two-Echelon Inventory System," Management Science, INFORMS, vol. 45(10), pages 1416-1431, October.
- Bruce L. Miller, 1974. "Dispatching from Depot Repair in a Recoverable Item Inventory System: On the Optimality of a Heuristic Rule," Management Science, INFORMS, vol. 21(3), pages 316-325, November.
- Axsater, Sven, 2003. "Evaluation of unidirectional lateral transshipments and substitutions in inventory systems," European Journal of Operational Research, Elsevier, vol. 149(2), pages 438-447, September.
- H. Jönsson & E. A. Silver, 1987. "Analysis of a Two-Echelon Inventory Control System with Complete Redistribution," Management Science, INFORMS, vol. 33(2), pages 215-227, February.
- Ravi Anupindi & Yehuda Bassok & Eitan Zemel, 2001. "A General Framework for the Study of Decentralized Distribution Systems," Manufacturing & Service Operations Management, INFORMS, vol. 3(4), pages 349-368, February.
- Jayashankar M. Swaminathan & Sridhar R. Tayur, 2003. "Models for Supply Chains in E-Business," Management Science, INFORMS, vol. 49(10), pages 1387-1406, October.
- Nils Rudi & Sandeep Kapur & David F. Pyke, 2001. "A Two-Location Inventory Model with Transshipment and Local Decision Making," Management Science, INFORMS, vol. 47(12), pages 1668-1680, December.
- Maqbool Dada, 1992. "A Two-Echelon Inventory System with Priority Shipments," Management Science, INFORMS, vol. 38(8), pages 1140-1153, August.
When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:192:y:2009:i:2:p:561-575. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.