Effects of consumer stockpiling on strategic inventory with Buy-One-Get-One promotions
研究了消费者囤货行为如何影响零售商战略库存，发现买一送一促销会减少战略库存但增加零售商和制造商利润，同时降低消费者剩余。
Strategic inventory held by retailers has been acknowledged for its potential to benefit the entire supply chain. However, strategic inventory may also disadvantage the retailer. Additionally, retailers are increasingly turning to quantity-based discounts, such as Buy-One-Get-One (BOGO), to dynamically adjust their pricing and inventory strategies while increasing consumer stockpiling. We delve into the impact of consumer stockpiling on strategic inventory in supply chains. This two-level inventory problem is relevant when considering consumer anticipations and BOGO on products with stable consumption. We construct a dynamic game-theoretic supply chain model that incorporates BOGO and consumer anticipations. Results reveal that consumer anticipations and BOGO can induce consumer stockpiling, causing a temporal shift in demand. Surprisingly, while consumer anticipation can increase in the retailer's strategic inventory, BOGO can reduce it. This reduction is observed regardless of whether consumers anticipate future prices or not. Importantly, BOGO can increase profits for the retailer and the manufacturer, although it may come the expense of reducing consumer surplus. We compare BOGO with rebates, highlighting significant disparities in their impact on supply chain strategies. Our results provide valuable insights into the design of pricing and promotion strategies aimed at reducing strategic inventory and managing consumer stockpiling.