Planning for Demand Uncertainties during Promotional Cycles of Modern Retail

- by Devdatta Jain & Meenakshi Chhajer *

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Eat the Pie

Each channel partner demands a share of the benefits gained by combined effort. To quantify these benefits, we propose a model where benefits are shared directly or indirectly between trade partners based on synergy levels between both the partners.

In this model, the benefits to retailer have a cost (monetary or effort) to supplier and benefits to suppliers have a cost to retailers. Hence, quantifying the benefits to both the partners will determine the sharing level of benefits gained by collaborative effort.

Benefits to retailer are discounts, CSL (Customer Satisfaction Level), Lower Order Error Rate, Higher Freshness Levels, etc., where as benefits to supplier are Logistics Cost Saving, Branding Opportunities, etc.

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* Contributed by: -
Devdatta Jain & Meenakshi Chhajer,
National Institute of Industrial Engineering (NITIE), Mumbai.

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