Abstract
Free shipping with conditions has become one of the most effective marketing tools, so more and more companies especially e-business companies become to offer free shipping to buyers whenever their orders placed exceeds the minimum quantity specified by them. In this paper, we examine the optimal order strategy of a retailer who faces deterministic or stochastic demand when suppliers offer free shipping, and analyze the impacts of the free shipping quantity and the transportation cost on the retailer's optimal order strategy through the optimal order strategy we derived and an extensive numerical study.
| Original language | English |
|---|---|
| Pages (from-to) | 506-512 |
| Number of pages | 7 |
| Journal | Xitong Gongcheng Lilun yu Shijian/System Engineering Theory and Practice |
| Volume | 30 |
| Issue number | 3 |
| Publication status | Published - Mar 2010 |
| Externally published | Yes |
Keywords
- EOQ model
- Free shipping
- Newsvendor model
- Order strategy