ThisstudyfocusesoninventorystrategiesofInternetretailers(etailers).Theetailerfacesoptionsofholdingherowninventoryoroutsourcingthroughthethirdparty(ies).Weassessetailerinventorystrategiesthroughmathematicalmodelingandnumericalexperiments.Whenorderingandholdingherownstock,theetailerhasfullcontroloftheorderfulfillmentprocessbutbearstheinventory-relatedrisk.Whenoutsourcingstock,etailer'sordersmaynotgetanequalpriorityasforthoseofthethirdparty'sown.Builtuponsimpleoperationsresearchmodels,thenumericalexperimentssuggestthattheetailerisbetteroffrelyingonotherstofulfillordersifherdemand(profitmargin)islow,butshouldreverttothestrategyofmaintainingherowninventoryifhersalesvolume(profitmargin)isrelativelyhigh.Otherfactorsarealsoinvestigated.Thesefindingsseemtoconfirmwhatarebeingpracticedintheindustry.
