 Supply chain coordination with stock-dependent demand rate and credit incentivesShuai Yang, Ki-sung Hong and Chulung Lee International Journal of Production Economics, 2014, vol. 157, issue C, 105-111 Abstract: In this paper, we consider a supply chain which consists of a single manufacturer and a single retailer with a single product type. Demand is assumed to be dependent on the retailer's stock level. Without coordination, the retailer determines its order quantity to maximize its own profit, which is usually smaller than the manufacturer's economic production quantity. Three coordination policies are presented to coordinate the manufacturer's and the retailer's decisions. First, the credit period policy and the quantity discount policy are developed and the total profits under the two policies are compared. Then we develop a centralized supply chain policy and show that there is a unique optimal order quantity to achieve a perfect coordination. The centralized supply chain can get higher or equal channel profit while the credit period policy and the quantity discount policy are easier to achieve. Numerical examples are provided to illustrate the proposed policies. Keywords: Supply chain; Stock-dependent demand; Credit period; Quantity discount; Coordination (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:157:y:2014:i:c:p:105-111 DOI: 10.1016/j.ijpe.2013.06.014 Access Statistics for this article International Journal of Production Economics is currently edited by Stefan Minner More articles in International Journal of Production Economics from Elsevier |
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