Abstract
Abstract We discuss how omni-channel supply chain networks can be structured in terms of facilities, inventory, transportation and information to be both cost effective and responsive to customer needs. This requires exploiting the complementary strengths of the physical and the online channel to create an omni-channel portfolio that can tailor the fulfillment of each customer request based on product and customer characteristics. To be successful, a firm must target price or service conscious customers using different channels based on the demand uncertainty, value, and information complexity of the product being sold. In general, the physical channel should be used to serve frequent and predictable needs in a cost effective manner. The online channel should be used to provide variety and serve sporadic needs at low cost. The physical channel can also serve as a showroom and pickup location for the online channel to improve customer service and decrease cost.
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