Inventory strategy of fresh products for omni-channel supply chains

Abstract

By constructing the consumers’ utility function, this article calculates the optimal order quantity and optimal expected profit of a fresh retailer under the centralized and decentralized inventory strategy in an omni-channel supply chain. In addition, the impact of consumers’ channel preference, consumers’ demand transfer behavior, and the "buy-online-pickup-in-store" (BOPS) service on retailers’ inventory strategy are analyzed. The results show that opening a BOPS service is not always beneficial to retailers. However, it is always beneficial for retailers to eliminate the differences between channels. Under the centralized inventory strategy, the optimal order quantity and expected profit are only affected by the freshness-keeping cost, while under the decentralized inventory strategy, they are affected by various consumer behaviors. A reasonable inventory management strategy should be adopted according to the product type, inventory cost, consumer preferences, and order quantity.

Keywords:

• Consumer behavior
• Inventory strategy
• Fresh products
• Omni-channel supply chain
• Buy-online-pickup-in-store

Disclosure Statement

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this article.

Data Availability Statement

Data sharing is not applicable to this article as no new data were created or analyzed in this study.

Additional information

Funding

This work was supported by National Natural Science Foundation of China (71871098), and the Major Program of National Social Science Foundation of China (22&ZD082).