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

Author

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  • 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
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    Cited by:

    1. 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).
    2. 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.
    3. 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.

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