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Investment decision making in improving multiple sales channels
Dissertation   Open access

Investment decision making in improving multiple sales channels

Yasamin Salmani
Doctor of Philosophy (Ph.D.), Drexel University
May 2019
DOI:
https://doi.org/10.17918/etd-9540
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Salmani_Yasamin_20191.92 MBDownloadView

Abstract

Business logistics Multiple criteria decision making Resource allocation Operations Research
A supply chain, employing multiple sales channels, needs to continually enhance these channels for achieving competitive advantage. The purpose of this dissertation is to provide a systematic procedure for optimal investment decisions towards improving existing sales channels in a multi-channel multi-product retail setting. The research provides a channel-level benefit-cost analysis, as opposed to the common product-level profitability, through an integration of operations and marketing perspectives. The motivation for undertaking this study is the strategic investment decision, on the part of many established firms that typically utilize multiple channel structures, to enhance overall sale channel performance and, ultimately, improve the competitive position. In pursuing our objective, an analytic network process, that considers both customer priorities and demand correlations among channels, is suggested. Utilizing a proposed benefit-cost ratio metric for each channel, incorporating customer input information, as well as relevant operating costs, we outline a mathematical programming procedure for determining the optimal allocation of a limited investment budget among existing channels. Our suggested methodology is illustrated by several realistic numerical examples and some selected sensitivity analysis. The results show that the optimal allocation decision for the company changes as the desired level of service offered to the customers is varied. This finding is likely to be significant for real-world practitioners, from the standpoint of making effective investment decisions for channel improvement.

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