What is the impact of demand patterns on integrated online-offline and buy-online-pickup in-store (BOPS) retail in a smart supply chain management?

Abstract

Retailers aim to provide in-person and remote interactions to accelerate purchases through hybrid methods, which introduce additional delivery and emissions loads but create a seamless shopping experience. The challenges of unified inventory, customer information, pricing, demand forecasting complications, and order fulfillment are met successfully in the hybrid methods. Here, a smart supply chain management that integrates traditional physical presence with cloud-based and hybrid buy-online-pickup in-store channels is optimized to meet customer demand in different demand patterns. The demand patterns considered are linear, cubic, and normalized functions of the selling price, the advertising cost, and the product lifetime. The article incorporates sustainable supply chain and omnichannel strategies to optimize supply chain performance and profitability. The paper compares the results of the proposed models with traditional supply chain models and provides some managerial insights and suggestions for online retailers. Numerical simulation reveals that nonlinear price dependence in demand provides an opportunity for higher promotional investment with a substantial rise in optimal selling price and overall profit. The shift-to-imperfect probability is seen to be the volatile component in the solution surface. The markup of the offline channel has a greater impact than buy-online-pickup in-store markup.