A new demand function graph: Analysis of retailer-to-individual customer product supply strategies under a non-essential demand pattern

Abstract

The core objective of a successful product supply strategy is to determine the mechanism through which consumers’ psychological effects influence customer demand. As stated in the theory of supply and demand, a higher level of dynamic equilibrium should be formed in which demand drives supply and supply creates demand. There is a lack of systematic research in the literature on the identification of consumer goods demand attributes and the formation of influencing factors in consumer goods supply chains. In this paper, we use the literature on demand functions and product pricing functions to establish three mathematical models to study the factors that influence retailers in designing and planning product supply strategies for different customers under nonessential demand patterns and to solve the profit maximization problem. The results of numerical examples validate the validity of the model. The research results can help retailers develop different supply strategies according to different types of customers and different demand patterns, thereby improving business performance. The theoretical contribution of this study is the construction of value ranges and a demand function diagram for identifying consumer product demand attributes.