Stocking Decision and Supply Chain Coordination under the Occurrence of Backlogging, Brand Switching, and Store Switching

抄録

Customers react differently when a product is temporarily unavailable at a store, depending on their brand and store loyalty. By including backlogging, brand switching, and store switching—which we consider a customer's active responses to product stockout—we extend a traditional newsvendor model to apply to the two-stage supply chain of a manufacturer and multiple homogeneous retailers, each of which sells several substitutable products to end-customers. This research investigates the effect of consumer behavior with regard to product unavailability on a retailer's stocking decisions, the retailer's expected profits, and the possibility of supply chain coordination. Moreover, assuming that the building of brand and store loyalty positively affects a customer's tendency to respond actively to stockouts, we explore how a firm's marketing efforts influence supply chain coordination over a product's life cycle. We find that an active response to stockout is not always beneficial for an individual firm but can, at certain levels, substitute for a supply chain contract as a tool to coordinate the supply chain. In addition, we show that when customer response to product unavailability is sufficiently active, the additional profits resulting from the development of customer's loyalty can cover the buy-back payment the manufacturer must pay to the retailers. Based on our analytical results, we propose managerial implications regarding how a supply chain should adjust loyalty management over a product's life cycle.