This study investigates the impacts of an electronic marketplace with multiple independent retailers for a smart grocery ordering system. Apart from replenishing products from suppliers, the system can also purchase/sell products from/to the electronic marketplace through 'spot shops'. Both static and dynamic pricing models for the electronic marketplace are developed. An extensive numerical experiment is conducted and the results show that under both static and dynamic pricing, (i) the inventory cost of the aggregated supply chain is significantly reduced; (ii) each participant also enjoys significant cost savings from employing the electronic marketplace. Furthermore, the cost savings increase as the lead times from suppliers increase and/or the variability of their demands increases. The participants' cost savings also increase as more participants employ the electronic marketplace.
Bibliographical noteFunding Information:
Acknowledgments This research was supported by Basic Science Research Program through the National Research Foundation of Korea (NRF) funded by the Ministry of Education, Science and Technology (2010-0016207). This research was also supported by a Korea University Grant.
- Electronic marketplace
- Inventory control
- Smart home
- Supply chain management
ASJC Scopus subject areas
- Computer Science Applications
- Electrical and Electronic Engineering