AN INVENTORY CONTROL POLICY WITH TRACKING INFORMATION FOR DUAL-CHANNEL SUPPLY CHAINS

Abstract

Recently, many products have been sold through retail stores and direct sales via the Internet. For dual-channel supply chains, Chiang and Monahan (2010) and Chiang (2010) have proposed an inventory control policy; however, they assumed one-for-one replenishment and short replenishment lead times. For single-channel supply chains with long and uncertain replenishment lead times, Liu et al. (2009) have introduced tracking information into inventory control. However, they did not consider the cost of tracking information. Therefore, in this paper, a Markov chain model for dual-channel supply chains with long and uncertain replenishment lead times is developed, and an inventory control policy is proposed that considers tracking information and its cost. The performance of the proposed policy is evaluated and compared with two policies, one without tracking information and the other without reduplicated normal replenishment. The results show the effectiveness of the proposed policy.

Keywords

• Dual-channel supply chain
• Replenishment lead time
• Lot replenishment
• Tracking information
• Markov analysis