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The COVID-19 pandemic has had a serious impact on firms’ sourcing strategies. Since COVID-19 disrupted the supply chain, firms have had to make emergency purchases from other suppliers. In addition, emergency ordering is one of the most effective strategies to achieve sustainable operations because such a strategy can save inventory costs. We aim to address a retailer’s emergency procurement strategies during the COVID-19 pandemic. We use prospect theory and the newsvendor model to uncover the retailer’s inventory decisions. In our study, we find that retailers have the choice to order items before the selling period at the normal purchase price, and, if available, they can order them before the end of the selling period at the urgent purchase price. We perform a comparison of the optimal ordering policy and margins in this case with the conventional and loss aversion models. The influence of emergency procurement on the optimal order policy and margins is investigated as well. This paper contributes in theory that we innovatively capture the uncertainty of emergency sourcing, which is a feature that has never been considered in current research.

Retailers advertise on different sales channels. When consumers buy online, the effectiveness of advertising is discounted because they cannot feel the product. Observing this phenomenon, this paper studies the advertising strategy of a dual-channel retailer. In this paper, we build stylized game models for the retailer’s price and advertising levels on online and offline channels, respectively. Our contribution is to provide prescriptions for how dual-channel retailers make price and advertise decisions and determine which channel is more profitable for retailers. We find that advertising discounts are not always harming the retailer’s profits. The level of advertising discounts causes retailers to increase the selling price when consumers engage in online shopping. Also, we derive that retailers can choose the sales channels based on the level of consumers’ channel preference of consumers. Interestingly, an increase in the level of advertising discounts will contribute to the growth of the retailer’s profit. Finally, by numerical analysis, we demonstrate the robustness of the results.