Universität zu Köln

Protopappa-Sieke, Margarita, Sieke, Marcel A. and Thonemann, Ulrich ORCID: 0000-0002-3507-9498 (2016). Optimal two-period inventory allocation under multiple service level contracts. Eur. J. Oper. Res., 252 (1). S. 145 - 156. AMSTERDAM: ELSEVIER SCIENCE BV. ISSN 1872-6860

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Abstract

Optimal inventory allocation policies have a significant impact on profits in the retail industry. A manufacturer ships products to the retailers' stores where the end customers buy the product during the selling season. It has been put forward that it is beneficial for the manufacturer to reserve a certain fraction of the inventory for a second replenishment. Then the manufacturer can replenish the retailers' inventories optimally and can take advantage of the risk pooling effect. In practice, retailers require a certain availability of the product throughout the selling season. Supply contracts are used to coordinate the delivery of products. Under such a contract, the manufacturer agrees to achieve a certain service level and to pay a financial penalty if she misses it. We analyze how a manufacturer responds to a service level contract if she wants to minimize her expected costs. We develop an allocation strategy for the multiple retailer case and find that our results allow for a better understanding of the effect of service level contracts on manufacturers and retailers. (C) 2016 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Protopappa-Sieke, Margarita UNSPECIFIED UNSPECIFIED UNSPECIFIED Sieke, Marcel A. UNSPECIFIED UNSPECIFIED UNSPECIFIED Thonemann, Ulrich UNSPECIFIED orcid.org/0000-0002-3507-9498 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-271886
DOI:	10.1016/j.ejor.2016.01.013
Journal or Publication Title:	Eur. J. Oper. Res.
Volume:	252
Number:	1
Page Range:	S. 145 - 156
Date:	2016
Publisher:	ELSEVIER SCIENCE BV
Place of Publication:	AMSTERDAM
ISSN:	1872-6860
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language DISTRIBUTION-SYSTEM; STOCK ALLOCATION; WAREHOUSE; POLICIES; COSTS Multiple languages Management; Operations Research & Management Science Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/27188