IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i23p10022-d454734.html
   My bibliography  Save this article

Inventory Share Policy Designs for a Sustainable Omni-Chanel E-Commerce Network

Author

Listed:
  • Damla İzmirli

    (Department of Industrial Engineering, Faculty of Engineering, Yasar University, Izmir 35100, Turkey)

  • Banu Yetkin Ekren

    (Department of Industrial Engineering, Faculty of Engineering, Yasar University, Izmir 35100, Turkey)

  • Vikas Kumar

    (Faculty of Accounting, Ton Duc Thang University, Ho Chi Minh City District 7, Vietnam
    Bristol Business School, University of the West of England, Bristol BS16 1QY, UK)

Abstract

This paper studies inventory share policies for sustainable omni-channel e-commerce supply network design by seeking for a good integration policy of online and offline retailers so that the overall supply network reduce its cost, environmental negative impacts by the decreased number of shipments from the main depot, and increase its responsiveness. By the recent advancement in information technologies and internet use, e-commerce practice gained popularity also to keep up with the competitive environment. The increased competitive supply chain environment has revealed the business-to-business (B2B) concepts enabling business applications between companies. Strategic alliance is a partnership concept realized between two or more organizations ensuring that stages are managed with consideration of the welfare of the others in the whole network. By considering that there are inventory share policies between stages, we accept the existence of strategic alliance implementation in the network, aiming to increase total network flexibility and profitability as well as sustainability in the network. In the study, we research inventory share policies towards strategic alliance concept to have a network design with a decreased negative effect of demand uncertainty and increased profitability in the network. By inventory share policies, businesses share their current inventories with the others so that transportation cost and CO 2 emission caused by traffic intensity is decreased in the network. We propose six inventory share policy combinations and optimize the ( s , S ) inventory levels under those policies by minimizing total network cost. We utilize the simulation modeling approach for the modeling purpose. We compare the policy results based on the total network cost, the total number of shipments completed from the main warehouse, and total lost sale cost, etc., at the optimal levels and suggest the best policy design.

Suggested Citation

  • Damla İzmirli & Banu Yetkin Ekren & Vikas Kumar, 2020. "Inventory Share Policy Designs for a Sustainable Omni-Chanel E-Commerce Network," Sustainability, MDPI, vol. 12(23), pages 1-16, December.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:23:p:10022-:d:454734
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/23/10022/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/23/10022/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Roberto Moro Visconti & Donato Morea, 2019. "Big Data for the Sustainability of Healthcare Project Financing," Sustainability, MDPI, vol. 11(13), pages 1-17, July.
    2. Amiri-Aref, Mehdi & Klibi, Walid & Babai, M. Zied, 2018. "The multi-sourcing location inventory problem with stochastic demand," European Journal of Operational Research, Elsevier, vol. 266(1), pages 72-87.
    3. Hoppner, Jessica J. & Griffith, David A., 2015. "Looking Back to Move Forward: A Review of the Evolution of Research in International Marketing Channels," Journal of Retailing, Elsevier, vol. 91(4), pages 610-626.
    4. van Wijk, A.C.C. & Adan, I.J.B.F. & van Houtum, G.J., 2019. "Optimal lateral transshipment policies for a two location inventory problem with multiple demand classes," European Journal of Operational Research, Elsevier, vol. 272(2), pages 481-495.
    5. Alvarez, E.M. & van der Heijden, M.C. & Vliegen, I.M.H. & Zijm, W.H.M., 2014. "Service differentiation through selective lateral transshipments," European Journal of Operational Research, Elsevier, vol. 237(3), pages 824-835.
    6. Paterson, Colin & Kiesmüller, Gudrun & Teunter, Ruud & Glazebrook, Kevin, 2011. "Inventory models with lateral transshipments: A review," European Journal of Operational Research, Elsevier, vol. 210(2), pages 125-136, April.
    7. Hammami, Ramzi & Nouira, Imen & Frein, Yannick, 2015. "Carbon emissions in a multi-echelon production-inventory model with lead time constraints," International Journal of Production Economics, Elsevier, vol. 164(C), pages 292-307.
    8. Alexander Hübner & Andreas Holzapfel & Heinrich Kuhn, 2016. "Distribution systems in omni-channel retailing," Business Research, Springer;German Academic Association for Business Research, vol. 9(2), pages 255-296, August.
    9. Zhang, Jie & Farris, Paul W. & Irvin, John W. & Kushwaha, Tarun & Steenburgh, Thomas J. & Weitz, Barton A., 2010. "Crafting Integrated Multichannel Retailing Strategies," Journal of Interactive Marketing, Elsevier, vol. 24(2), pages 168-180.
    10. Banerjee, Avijit & Burton, Jonathan & Banerjee, Snehamay, 2003. "A simulation study of lateral shipments in single supplier, multiple buyers supply chain networks," International Journal of Production Economics, Elsevier, vol. 81(1), pages 103-114, January.
    11. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jose Alejandro Cano & Abraham Londoño-Pineda & Maria Fanny Castro & Hugo Bécquer Paz & Carolina Rodas & Tatiana Arias, 2022. "A Bibliometric Analysis and Systematic Review on E-Marketplaces, Open Innovation, and Sustainability," Sustainability, MDPI, vol. 14(9), pages 1-42, May.
    2. Damla İzmirli & Banu Y. Ekren & Vikas Kumar & Siwarit Pongsakornrungsilp, 2021. "Omni-Chanel Network Design towards Circular Economy under Inventory Share Policies," Sustainability, MDPI, vol. 13(5), pages 1-21, March.
    3. Kumar, Anil & Naz, Farheen & Luthra, Sunil & Vashistha, Rajat & Kumar, Vikas & Garza-Reyes, Jose Arturo & Chhabra, Deepak, 2023. "Digging DEEP: Futuristic building blocks of omni-channel healthcare supply chains resiliency using machine learning approach," Journal of Business Research, Elsevier, vol. 162(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Naderi, Siamak & Kilic, Kemal & Dasci, Abdullah, 2020. "A deterministic model for the transshipment problem of a fast fashion retailer under capacity constraints," International Journal of Production Economics, Elsevier, vol. 227(C).
    2. García-Benito, Juan Carlos & Martín-Peña, María-Luz, 2021. "A redistribution model with minimum backorders of spare parts: A proposal for the defence sector," European Journal of Operational Research, Elsevier, vol. 291(1), pages 178-193.
    3. Zümbül Atan & Lawrence V. Snyder & George R. Wilson, 2018. "Transshipment policies for systems with multiple retailers and two demand classes," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 40(1), pages 159-186, January.
    4. Meissner, Joern & Senicheva, Olga V., 2018. "Approximate dynamic programming for lateral transshipment problems in multi-location inventory systems," European Journal of Operational Research, Elsevier, vol. 265(1), pages 49-64.
    5. Satır, Benhür & Savasaneril, Secil & Serin, Yasemin, 2012. "Pooling through lateral transshipments in service parts systems," European Journal of Operational Research, Elsevier, vol. 220(2), pages 370-377.
    6. Guangyuan Yang & Rommert Dekker, 2010. "Service Parts Inventory Control with Lateral Transshipment that takes Time," Tinbergen Institute Discussion Papers 10-025/4, Tinbergen Institute, revised 10 Mar 2010.
    7. Yang, Guangyuan & Dekker, Rommert & Gabor, Adriana F. & Axsäter, Sven, 2013. "Service parts inventory control with lateral transshipment and pipeline stockflexibility," International Journal of Production Economics, Elsevier, vol. 142(2), pages 278-289.
    8. Bhatnagar, Rohit & Lin, Bing, 2019. "The joint transshipment and production control policies for multi-location production/inventory systems," European Journal of Operational Research, Elsevier, vol. 275(3), pages 957-970.
    9. de Kok, Ton & Grob, Christopher & Laumanns, Marco & Minner, Stefan & Rambau, Jörg & Schade, Konrad, 2018. "A typology and literature review on stochastic multi-echelon inventory models," European Journal of Operational Research, Elsevier, vol. 269(3), pages 955-983.
    10. Wan, Xiang & Gligor, David & Fan, Xuemei & Qi, Yinan & Britto, Rodrigo, 2024. "The value of timing, frequency, and quantity: The effects of transshipments on inventory turnover and order fulfillment," International Journal of Production Economics, Elsevier, vol. 274(C).
    11. Lee, Young Hae & Jung, Jung Woo & Jeon, Young Sang, 2007. "An effective lateral transshipment policy to improve service level in the supply chain," International Journal of Production Economics, Elsevier, vol. 106(1), pages 115-126, March.
    12. Frank Schneider & Ulrich W. Thonemann & Diego Klabjan, 2018. "Optimization of Battery Charging and Purchasing at Electric Vehicle Battery Swap Stations," Transportation Science, INFORMS, vol. 52(5), pages 1211-1234, October.
    13. Brandimarte, Paolo & Craparotta, Giuseppe & Marocco, Elena, 2024. "Inventory reallocation in a fashion retail network: A matheuristic approach," European Journal of Operational Research, Elsevier, vol. 317(2), pages 603-615.
    14. Tiacci, Lorenzo & Saetta, Stefano, 2011. "Reducing the mean supply delay of spare parts using lateral transshipments policies," International Journal of Production Economics, Elsevier, vol. 133(1), pages 182-191, September.
    15. Patriarca, Riccardo & Costantino, Francesco & Di Gravio, Giulio & Tronci, Massimo, 2016. "Inventory optimization for a customer airline in a Performance Based Contract," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 206-216.
    16. Adivar, Burcu & Hüseyinoğlu, Işık Özge Yumurtacı & Christopher, Martin, 2019. "A quantitative performance management framework for assessing omnichannel retail supply chains," Journal of Retailing and Consumer Services, Elsevier, vol. 48(C), pages 257-269.
    17. (Yale) Gong, Yeming & Yücesan, Enver, 2012. "Stochastic optimization for transshipment problems with positive replenishment lead times," International Journal of Production Economics, Elsevier, vol. 135(1), pages 61-72.
    18. Fritzsche, R., 2012. "Cost adjustment for single item pooling models using a dynamic failure rate: A calculation for the aircraft industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(6), pages 1065-1079.
    19. Mkansi, Marcia & Nsakanda, Aaron Luntala, 2021. "Leveraging the physical network of stores in e-grocery order fulfilment for sustainable competitive advantage," Research in Transportation Economics, Elsevier, vol. 87(C).
    20. Yang, Lu & Li, Xiangyong & Zhong, Ning, 2022. "Omnichannel retail operations with mixed fulfillment strategies," International Journal of Production Economics, Elsevier, vol. 254(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:23:p:10022-:d:454734. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.