Models for Retailers’ Supply Strategies Aimed at Individual Customers under the Essential Demand Pattern

Abstract

To address the issue of profit maximization for the retailer, this paper develops three mathematical models to study the factors that affect how retailers create product supply strategies aimed at individual customers with essential demand. The research results can help retailers effectively develop supply strategies targeting individual customers under essential demand patterns and improve the retailers’ business performance. As its main contribution, this paper constructs a mathematical model for a retailer’s product supply strategy under essential demand patterns for individual customers and considering the off-invoice, scan-back, and unsold recycling modes. The validity of these models is also tested by using numerical examples.