Abstract
ABSTRACTThis paper develops a two-level Omni-channel supply chain under price and delivery time sensitive additive stochastic demand. Retailer operates a direct online channel along with its traditional retail channel to satisfy wider range of consumers’ demand. Beside the price and stocking decisions for both the retail and the online channels, delivery lead time of online channel is also assumed as a decision variable because a longer delivery lead time diminishes customers’ acceptance and faithfulness to the online channel. Optimal stocking decisions are essential to control shortages or overstocks due to uncertain demand in both retail and online channels. The model depicts that delivery lead time has an adverse effect on online selling price as well as on online channel profit. The optimal delivery lead time decreases if lost sale due to delivery time increase. The article also analyses product compatibility range for successful operation of Omni-channel supply chain. The model is also illustrated through a numerical example.
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