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.
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.:
- Maqbool Dada, 1992. "A Two-Echelon Inventory System with Priority Shipments," Management Science, INFORMS, vol. 38(8), pages 1140-1153, 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Jayashankar M. Swaminathan & Sridhar R. Tayur, 2003. "Models for Supply Chains in E-Business," Management Science, INFORMS, vol. 49(10), pages 1387-1406, October.
- 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.
- 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.
- 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.
- Evers, Philip T., 2001. "Heuristics for assessing emergency transshipments," European Journal of Operational Research, Elsevier, vol. 129(2), pages 311-316, March.
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: (Zhang, Lei)
If references are entirely missing, you can add them using this form.