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Analyzing pricing, promised delivery lead time, supplier-selection, and ordering decisions of a multi-national supply chain under uncertain environment

Noori-Daryan, Mahsa, Ata Allah Taleizadeh and Fariborz Jolai

International Journal of Production Economics, 2019, vol. 209, issue C, 236-248

Abstract: Nowadays, price and delivery lead time are taken into account as important priorities of customers so that market demand often is sensitive to selling price and promised delivery lead time of products especially in pharmacy industry. Therefore, this study analyzes the optimal decisions of multi-national capacity-constraint producers and one retailer, as the members of a pharmacological chain, under demand response time uncertainty. The retailer, who faces price and delivery lead time dependent demand, orders its needed products from the selected producers with different nationalities to supply the market demand at the promised delivery lead time. Suppose that lost sale shortage occurs when the products are received after this promised lead time. Here, the optimal pricing, ordering, promised lead time, and supplier-selection policies are examined under three different game-theoretic approaches involving a decentralized approach under an open bid auction strategy, a centralized approach as well as a cooperative approach where demand is uncertain. Following, a numerical example and sensitivity analyses are surveyed the efficiency of a proposed model.

Keywords: Production; Pricing; Delivery lead time; Supplier-selection; Demand uncertainty; Open-bid auction; Game theory (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:proeco:v:209:y:2019:i:c:p:236-248