COORDINATION OF A BUYER-VENDOR SUPPLY CHAIN FOR A PERISHABLE PRODUCT UNDER SYMMETRIC AND ASYMMETRIC INFORMATION

Qin-Hong Zhang () and Jian-Wen Luo ()
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Qin-Hong Zhang: Sino-US Global Logistics Institute, School of Management, Shanghai Jiao Tong University, Shanghai, 200030, P. R. China
Jian-Wen Luo: School of Management, Shanghai Jiao Tong University, Shanghai, 200052, P. R. China

Asia-Pacific Journal of Operational Research (APJOR), 2011, vol. 28, issue 05, 673-688

Abstract: We consider a two-level supply chain for a perishable product with stock dependent demand, and study the supply chain coordination issues with quantity discount contract under both symmetric and asymmetric information. We design an optimal quantity discount contract for the vendor, and show that the quantity discount contract can coordinate the supply chain under symmetric information. However, the vendor is not able to realize supply chain coordination with only quantity discount contract if the buyer's holding cost is private information since the buyer may keep this information private for bargaining a higher price discount. Nevertheless, quantity discount contract is still beneficial to the vendor as compared to the case without quantity discount. Numerical experiments are conducted to demonstrate the theoretical results.

Keywords: Buyer-vendor coordination; quantity discount; perishable products; stock dependent demand; asymmetric information (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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DOI: 10.1142/S0217595911003508

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