Supply Chain Management and Delivery Mechanisms in Online Retail

Abstract

Supply chain Management and effective and prompt delivery of ordered goods is vital in efficient functioning of the online retail firms. Maintenance of inventory and warehouses accounts for major chunk of logistics cost in the online retail and hence achieving economies of scale through optimization of the total costs associated with inventorying and delivering the products to the target customer will definitely provide competitive advantage to the online retailers. The costs associated with the logistics management is dependent on different parameters for different products and hence generating a common logistics model to derive optimal inventory levels of different products in different warehouse locations available will help the online retails to considerably reduce the logistics cost. Hence, Product-Warehouse model has been developed utilizing Microsoft excel and has been utilized to perform cost benefit analysis for a given scenario when the three different warehousing models namely the centralized warehousing model, decentralized warehousing model and hybrid warehousing model are deployed.