Joint Decision on Pricing and Ordering for Omnichannel BOPS Retailers: Considering Online Returns

Abstract

Uncertainty in demand and high online return rates tend to generate a large inventory backlog after a hot selling season. Some well-known companies such as Burberry and H&M choose to burn these backlogs, which is very unfavorable to the sustainable development of enterprises and society. The omnichannel BOPS (Buy Online and Pickup in Store) provides consumers with a new and convenient choice of purchasing channels. Considering the probability of online return, we build expected profit models for retailers before and after opening a BOPS channel based on consumer surplus and purchase ratio via an online channel, store channel, and BOPS channel. Then, we prove the existence of optimal solutions and obtain the joint optimization decision on pricing and ordering. The results show that, under certain conditions, when the proportion of online channel buyers increases, the retailers' optimal decision before opening a BOPS channel is to reduce the price and increase the order quantity, and the retailers' optimal decision after opening a BOPS channel is to simultaneously reduce the price and the order quantity. Whether or not a BOPS channel is opened, when the purchase proportion of store channel increases, the optimal decision of retailers is to increase the price and order quantity at the same time. Furthermore, when the online return rate, the cost of online shopping, the inconvenient cost of the store channel, and the inconvenience of the BOPS channel relative to store channel increase, the optimal decision of retailers is to simultaneously reduce the price and order quantity. Moreover, when the maximum psychological value of the product increases, the optimal decision is to reduce the order quantity while increasing the price. In addition, the opening of a BOPS channel increases optimal price, optimal order quantity, and maximum expected profit.

Application of Capital Asset Pricing Model Based on BP Neural Network in E-commerce Financing

“…Hence, the neuron increment of the hidden layer is set as 5 in the sample training. e number of neurons is set as 5,10,15,20,25,30,35,40,45, and 50.…”

“…Therefore, from the perspective of “double carbon,” this study is the first to establish the CAPM model of e-commerce financing based on the Back Propagation Neural Network (BPNN). Next, the sample selection and model training for e-commerce enterprise financing are conducted through BPNN [ 5 ]. The experiment of the capital asset financing model of e-commerce enterprises is further conducted to obtain the complete e-commerce financing CAPM model.…”

Multiperiod Dynamic Pricing and Inventory Control Decisions for an Omnichannel BOPS Retailer with Reference Price Effects

“…Moreover, it is worth mentioning that the BOPS mode requires consumers to pay at the moment of ordering online, and they know the exact value of the product only after receiving/picking it, which may cause many product returns [18]. us, Liu and Xu [9] investigate an omnichannel BOPS retailer's pricing and ordering model considering online returns. Zhang et al [5] consider the omnichannel BOPS mode that allows both online and offline consumers to return and cancel orders.…”

“…In order to solve the abovementioned problems, this paper studies the pricing and inventory strategies of an omnichannel retailer with BOPS mode based on the influence of consumers' reference price. By analyzing the mechanism of the influence of consumer reference price on the pricing and inventory of the omnichannel retailer, it provides theoretical suggestions for omnichannel retailers to implement the pricing and inventory management of the BOPS mode, whereas recent research on joint pricing and inventory decisions of omnichannel retailers mainly focused on single ordering cycle and ignored the consumers' reference price effects (see, for example, [5,9]). Besides, previous literature on multiperiod coordination pricing and inventory control problem with reference price effects mainly focused on the single-channel supply chain, and little attention has been paid to the omnichannel field (see, for example, [8,10,11]).…”

Impacts of the BOPS Option on Sustainable Retailing

“…Li et al [24] studied the influences of BOPS option on the firm's cooperative advertising, and they found that the BOPS option can bring about similar incentive effects as cooperative advertising. Considering consumer returns, Liu and Xu [25] investigated the effects of BOPS option on retailer's optimal pricing and ordering decisions, and the results show that the optimal price, order quantity, and profit increase after adopting the BOPS option. Some studies also focus on other omnichannel retailing strategies, such as ROPS [26], Ship from Store [27], and Store return [28,29].…”