An integrated vendor-buyer model with stock-dependent demand

Mohsen S. Sajadieh, Anders Thorstenson and Mohammad R. Akbari Jokar

Transportation Research Part E: Logistics and Transportation Review, 2010, vol. 46, issue 6, 963-974

Abstract: We develop an integrated vendor-buyer model for a two-stage supply chain. The vendor manufactures the product and delivers it in a number of equal-sized batches to the buyer. The items delivered are presented to the end customers in a display area. Demand is assumed to be positively dependent on the amount of items displayed. The objective is to maximize total supply chain profit. The numerical analysis shows that buyer-vendor coordination is more profitable in situations when demand is more stock dependent. It also shows that the effect of double marginalization provides a link between the non-coordinated and the coordinated case.

Keywords: Batch; production; Double; marginalization; Inventory; Integrated; vendor-buyer; model; Stock-dependent; demand (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (14)

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