Retailer-to-Individual Customer Product Supply Strategies Under a Semireal Demand Pattern

Abstract

In the consumer goods supply chain, there are three different modes of demand: real, false, and semireal. It is an interesting topic to discuss the optimal profit of enterprises according to these three demand patterns. This paper develops three mathematical models that can be used to investigate the factors that affect retailers with respect to the design of product supply strategies for individual customers under a semireal demand pattern and thereby addresses the problem of retailers’ maximum profitability. The results of the present study show that these models may effectively help retailers develop appropriate supply strategies for individual customers under a semireal demand pattern; in turn, this may help retailers improve operational performance. The main contribution of the current study lies in the construction of mathematical models of product supply strategies for the individual customer in the off-invoice mode, the scan-back mode, and the unsold-item processing mode under the semireal demand pattern. The effectiveness of the models has been verified through numerical calculations. In concrete management practice, the mathematical model given in this paper can be used to effectively adjust the quantity of goods purchased, correct retail prices, and optimize sales discounts to maximize profits.