An optimal lot sizing and pricing in two echelon supply chain

Abstract

This paper studies inventory and pricing policies in a non-cooperative supply chain with one supplier and several retailers who are involved in producing, delivering and selling a single product. We consider inventory policies in an information-asymmetric vendor managed inventory. The study consists of different scenarios where a supplier produces the product at the wholesale price to multiple retailers. The retailers also distribute the product in dispersed and independent markets at retail selling prices. The demand rate for each market is a nondecreasing concave function of the marketing expenditures of both local retailers and the manufacturer, but a non-increasing and convex function of the retail selling prices. The primary purpose is to determine wholesale price, marketing expenditure for supplier and retailers, replenishment cycles for the product, and backorder quantity to maximize the total profit for both groups of supplier and retailers. All scenarios are modeled as a Stackelberg game where the manufacturer is the leader and the retailers are the followers. A numerical study are presented to demonstrate the influences of decision variables and/or parameters in various scenarios.

A two-echelon supply chain model with price and warranty dependent demand and pro-rata warranty policy under cost sharing contract

“…Yeh et al (2007) investigated the effects of a free-repair warranty on the periodic replacement policy for a repairable product. Naeij and Shavandi (2010) developed a two-echelon supply chain model with one supplier and multi-retailer for a single product. Chen and Zhou (2012) presented a review of the issues associated with a manufacturer's pricing strategies in a two-echelon supply chain that comprises one manufacturer and two competing retailers, with warranty period-dependent demand.…”

Supplier selection for vendor-managed inventory in healthcare using fuzzy multi-criteria decision-making approach ,

“…For example, the optimal pricing and lot sizing vendor managed inventory (Ziaee & Bouquard, 2010), a comparison of performance results of VMI practices and define enablers of successful VMI usages (Classen, et al, 2008). Some literatures have discussed VMI in various useful aspects of manufacturing sectors; for example, production-distribution planning/ supply chain management ( Niknamfar, 2015) , home appliances industry ( Tony & Zamalo, 2005) , inventory and pricing policies in non-cooperative supply chain ( Naeij & Shavandi, 2010) . Regarding to VMI advantages, it is increasingly used in many industries for day-to-day operations of several organizations.…”