Centralized Shop Strategy with Two Orders

Abstract

Abstract: In China's supermarket industry, there are both foreign brands represented by Carrefour and a variety of domestic brands. The business strategies of the two are totally different. Carrefour operates a small number of large stores, while domestic supermarkets operate a large number of small stores. This paper constructs a model of centralized shop strategy with two orders by combining centralized shop and the quick response supply chain innovatively. Then we obtain the optimal number of stores which should be centralized and the profit comparison between centralized shop model and decentralized shop model by solving the model. A numerical study ia also applied to verify the conclusions intuitively. Based on the study, we sum up a management mode characterized by "Centralized Shop + two Orders" of large retail enterprises, which might provide enlightenments and references for the development of domestic retail enterprises.

Key words: large retail enterprises, centralized shop, quick response supply chain, transportation cost

Gong Qiguo, Ma Yundanlamu, Wang Hui. Centralized Shop Strategy with Two Orders[J]. Management Review, 2021, 33(7): 274-281.

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