A cloud‐based responsive replenishment system in a franchise business model using a fuzzy logic approach

In today's volatile markets, increasingly unpredictable customer demand is exerting great challenges to responsive replenishment. The complexity of responsive replenishment is higher when the business is global in which demand in both domestic and overseas markets has to be catered for. The emergence of cloud computing has eased the difficulties as it allows nearly real‐time access to a universal platform for information sharing between franchisors and franchisees, creating huge opportunities for understanding global market needs for responsive replenishment. Considering the existence of uncertainties due to the fluctuating demands, fuzzy logic is useful in providing decision support for replenishment in uncertain environments. This paper presents a cloud‐based responsive replenishment system to manage operation data of a franchise business using cloud computing, and for analysis using fuzzy logic in order to provide franchisors with the required inventory levels. To the best of our knowledge, this is the first study that applies cloud computing and artificial intelligence techniques in franchising. A pilot run of the system is conducted in an education company, which is considered to be a good representation of an industry operating with a franchise model. The results show that the system allows franchisors to formulate effective responsive replenishment strategies.