Internet book retailing and supply chain management: An analytical study of inventory location speculation and postponement

Joseph P. Bailey, Elliot Rabinovich

Research output: Contribution to journalArticle

53 Scopus citations

Abstract

Internet retailing models support supply chains where consumer order locations are decoupled from inventory locations. In this setting, retailers dynamically consider inventory location speculation and postponement to fulfill their orders. Particularly, retailers can manage inventory to fulfill orders through two opposing strategies: in-stock inventory and drop-shipping. This paper extends the supply chain management literature by modeling Internet retailers' decisions to balance their offerings between these two strategies. The results show how retailers depend more on both of these strategies as their market share and product popularity increase. Thus, both inventory management strategies may be considered simultaneously to better manage Internet retailers' inventory.

Original languageEnglish (US)
Pages (from-to)159-177
Number of pages19
JournalTransportation Research Part E: Logistics and Transportation Review
Volume41
Issue number3
DOIs
StatePublished - May 2005

Keywords

  • Electronic commerce
  • Inventory management
  • Postponement

ASJC Scopus subject areas

  • Business and International Management
  • Civil and Structural Engineering
  • Transportation

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