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Mathematical Problems in Engineering
Volume 2014, Article ID 675414, 12 pages
http://dx.doi.org/10.1155/2014/675414
Research Article

A New Business Mode for FTs Chain in an E-Commerce Environment

The School of Management, University of Science and Technology of China, Hefei 230026, China

Received 26 March 2014; Revised 15 May 2014; Accepted 19 June 2014; Published 9 July 2014

Academic Editor: Xiaohang Yue

Copyright © 2014 Xihui Wang et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

With the rise in the online demand for fashion and textiles (FTs) along with the development of e-commerce, a business mode called drop-shipping mode has emerged. Despite the fact that the drop-shipping mode has many merits, this method has less earning power compared with the traditional business mode. This study proposes a mix business mode for FTs chains in an e-commerce environment. Traditional and drop-shipping modes are special cases of the mix mode. In addition, a generalized model is built to analyze the profitability of FTs chains. Our study shows that, in most cases, the mix mode improves overall profit of FTs chain. Moreover, we consider the seasonality and the short life cycle of fashion items in analyzing the relationship between the e-retailer's optimal inventory level and demand distribution parameters. The numerical example shows that, by changing their inventory level, e-retailers can address the demand fluctuation using the mix mode. The proposed mix mode employs both business modes to enhance the profitability of a FTs chain. As such, the mix mode is an effective method to address demand fluctuation for FTs in an e-commerce environment.