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.
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ABSTRACT: The paper deals with an inventory model to determine the retailer’s optimal order quantity for similar products. It is assumed that the amount of display space is limited and the demand of the products depends on the display stock level and the initiatives of sales staff where more stock of one product makes a negative impression of the another product. Also, the replenishment rates depend on the level of stocks of the items. The objective of the model is to maximize the profit function by trading off inventory costs, purchasing costs, cost of the effort of sales staff considering the effect of inflation and time value of money by Pontryagin’s Maximal Principles. The stability analysis of the concerned dynamical system has been analyzed. The sensitivity analysis of a suitable example is also carried out.Applied Mathematics and Computation 05/2012; 218(17):8736–8749. · 1.35 Impact Factor
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ABSTRACT: This paper investigates a Supply Chain System for deteriorating items in which a supplier supplies a manufacturer with raw material, and the manufacturer produces the finished goods. Demand rate is assumed to be time-sensitive in nature (Trapezoidal type), which allows three-phase variation in demand, and production rate is demand dependent. Our adoption of trapezoidal type demand reflects a real market demand for newly launched product. We show that the total cost function is convex. With the convexity, a simple solution algorithm is presented to determine the optimal order quantity and optimal cycle time of the total cost function. Numerical examples are given and the results are discussed.Yugoslav journal of operations research 09/2014;
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ABSTRACT: The replenishment size/production lot size problem both for perfect and imperfect quality products studied in this paper is motivated by the optimal strategy in a three layer supply chain consisting of multiple suppliers, manufacturers and retailers. In this model, each manufacturer produces each product with a combination of several raw materials which are supplied by each supplier. The defective products at suppliers and manufacturers are sent back to the respective upstream members at lower price than the respective purchasing price. Finally, the expected average profits of suppliers, manufacturers and retailers are formulated by trading off set up costs, purchasing costs, screening costs, production costs, inventory costs and selling prices. The objective of this chain is to compare between the collaborating system and Stakelberg game structure so that the expected average profit of the chain is maximized. In a numerical illustration, the optimal solution of the collaborating system shows a better optimal solution than the approach by Stakelberg.Applied Mathematics and Computation 02/2014; 229:139–150. · 1.35 Impact Factor