COORDINATING TWO-ECHELON SUPPLY CHAINS UNDER STOCK AND PRICE DEPENDENT DEMAND RATE

Shibaji Panda ()
Additional contact information
Shibaji Panda: Department of Mathematics, Bengal Institute of Technology, 1.no. Govt. Colony, Kolkata-700150, West Bengal, India

Asia-Pacific Journal of Operational Research (APJOR), 2013, vol. 30, issue 02, 1-20

Abstract: Coordination is imperative for improving supply chain performance. In this paper, we focus on coordination of a two-echelon supply chain consisting of a manufacturer and a price-setting retailer, which operates for a single product. Customer demand is influenced by retailer's instantaneous inventory level and selling price. The integrated system and the decentralized scenario, by considering manufacturer as the Stackelberg leader, are discussed. It is shown that conventional revenue sharing contract cannot coordinate the system but revenue and cost sharing (RCS) contract is able to coordinate the system and leads to a win–win outcome. The key contract parameters — cost sharing fraction, along with revenue sharing fraction and wholesale price are determined under explicit and implicit information of retailer's cost structure. Finally, it is shown that range of cost sharing fraction that leads to win–win situation is independent of the format of cost structure of retailer. Numerical examples are provided to illustrate the development of the model.

Keywords: Supply chain coordination; stock and price dependent demand; revenue sharing contract; revenue and cost sharing contract (search for similar items in EconPapers)
Date: 2013
References: View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217595912500510
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:apjorx:v:30:y:2013:i:02:n:s0217595912500510

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217595912500510

Access Statistics for this article

Asia-Pacific Journal of Operational Research (APJOR) is currently edited by Gongyun Zhao

More articles in Asia-Pacific Journal of Operational Research (APJOR) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().