Abstract: Aiming at the high operating cost of distribution network of physical retail enterprises with offline and online sales channels, the dual channel inventory optimization configuration problem under integrated channel integration and online order fulfillment is studied. Mathematical models are established under two different modes of distribution network operation, namely "dual-channel inventory independent management, online order decentralized fulfillment" and "dual-channel inventory integrated management, online order centralized fulfillment" respectively, and genetic algorithm based on real number coding is used to solve the problem. Results from a computational study illustrate that the second operation mode for dual-channel supply chain can reduce the total inventory cost by 17.25%, and alleviate the total inventory costs in the downstream of the distribution network.