Research on inventory and transportation integrated optimization model of supply chain on online shopping based on the revenue sharing contract

When the online stores and the logistics service providers make decision alone, as trade off phenomenon exists, inventory costs achieve the minimum while transportation costs are not the minimum or the opposite situation occurs. When implementing inventory and transportation integrated optimization, the profit of the whole supply chain and the stores increases, while the profit of the logistics service providers declines, thus the logistics service providers will not cooperate with the stores and the paper aims to solve these problems that how to minimize the costs of inventory and transportation and promote cooperation between the online stores and the logistics service providers. Solving such problems can not only minimize inventory costs and transportation costs, but also increase the profit of the logistics service providers and the stores. The core innovation of the paper is that both revenue sharing contract and ITIO are introduced into supply chain on online shopping which previous studies have not involved in. Compared with previous work, the paper takes both the online stores and the logistics service providers as the object of study and designs a kind of profit distribution mechanism which can raise both the profit of the logistics service providers and the stores in the process of ITIO. The paper builds revenue model of the individual decisions firstly, revenue model of ITIO secondly, revenue sharing model of ITIO based on the revenue sharing contract thirdly, and a numerical example verified the feasibility of the model finally.