Supply-chain coordination under an inventory-level-dependent demand rate
ABSTRACT In this paper, we consider coordination issues of a distribution system composed of a manufacturer and a retailer. The manufacturer offers a single product to the retailer and the demand for the product at the retailer's end is stock dependent. We focus on three aspects of the resulting supply chain. First, we discuss the manufacturer-Stackelberg game structure to determine how the manufacturer sets the wholesale price of the product and how the retailer in turn determines the order quantity. We assume that both the parties share relevant cost information. Then we develop a simple profit-sharing mechanism that would ultimately achieve perfect channel coordination. Finally, the manufacturer is provided with a quantity discount scheme to induce the retailer to increase the order quantity so as to maximize the manufacturer's profit. We show that this discount scheme also achieves the perfect coordination of the whole channel. Numerical examples are used to illustrate the models.
- SourceAvailable from: Sujit Kumar De
Article: An EOQ model with backlogging[Show abstract] [Hide abstract]
ABSTRACT: This paper deals with a new approach of linguistic dichotomous fuzzy variables for a classical backordered EOQ (Economic Order Quantity) model with PE (Promotional Effort) and selling price dependent demand rate. In practice, we have observed that the demand rate during a shortage period decreases with time. Based on these assumptions, we have developed a cost minimization problem (a crisp model) by trading off setup cost, inventory cost, backordering cost and cost for promotional effort. Then, we have studied a fuzzy model by considering the coefficient vectors as pentagon fuzzy numbers associated with some co-ordinates. Defuzzification is made with the help of the center-of-gravity method followed by a ranking index and the Euclidean distance of the objective function. Considering a numerical example, phi- (ϕ-)coefficients have been computed for each method and a decision is made according to the natural characteristics of the decision variables. Finally, conclusions are drawn, explaining the justification of the model.01/2015; DOI:10.1080/17509653.2014.995736
- [Show abstract] [Hide abstract]
ABSTRACT: A supply chain system has been investigated in which a single manufacturer procures raw materials from a single supplier, processes them to produce finished products, and then delivers the products to a single retailer. The customer’s demand rate is assumed to be time-sensitive in nature (ramp type) that allows two-phase variation in the demand and production rate. Our adoption of ramp type demand reflects a real market demand for a newly launched product. Shortages are allowed with partial backlogging of demand (only for the retailer), i.e. the rest represent lost sales. The effects of inflation of the cost parameters and deterioration are also considered separately. We show that the total cost function is convex. Using this convexity, a simple algorithm is presented to determine the optimal order quantity and optimal cycle time for the total cost function. The results are discussed with numerical examples and particular cases of the model discussed briefly. A sensitivity analysis of the optimal solution with respect to the parameters of the system is carried out.
- [Show abstract] [Hide abstract]
ABSTRACT: In this paper, a coordination model is developed for a single manufacturer-single retailer distribution supply chain dealing with short life-cycle products, operating under price-sensitive and stock-dependent random demand. Here, the demand is modeled in additive fashion that captures the three features, namely, price-sensitivity, initial stock dependency and uncertainty of demand. A numerical study is carried out to illustrate the model and sensitivity analysis is performed to analyze the impact of price-sensitivity, stock-dependency, and demand uncertainty on the supply chain performance. It is found that under the same price-sensitivity, at higher levels of stock dependency, as the demand variability is increased, supply chain performance is decreased.