Inventory management in e-commerce supply chain with lateral transshipment and quick response

Abstract

To enhance the competitiveness of an e-commerce enterprise by improving the performance of the supply chain, we discussed the effects of quick response (QR), lateral transshipment (LT) on inventory system, and propose a new inventory control strategy by combining QR and LT. System dynamics is used to model the inventory system for analyzing the effectiveness of QR, LT and the proposed strategy. Numerical example shows that QR has an impressing improvement on fulfillment rate if one pays higher cost, while LT could only increase the fulfillment rate slightly but maintain a lower cost. When using the proposed strategy, we found that the new inventory management strategy can improve the fulfillment rate by inheriting the advantages of QR and LT while maintaining the low cost. In addition, it has been found that the timing of LT may have an important impact on the performance of the supply chain.