Optimal pricing and inventory decisions in a centralised and de-centralised two-echelon inventory system under nonlinear price dependent demand

Dega Nagaraju, Kalla Kiran Kumar and S. Narayanan

International Journal of Logistics Systems and Management, 2018, vol. 29, issue 3, 374-398

Abstract: In this paper, a two-echelon inventory system with a single-manufacturer and single-retailer is considered. Mathematical model for both centralised and decentralised supply chain (SC) is developed by incorporating setup/ordering cost, carrying cost and transportation cost of the respective entities of the chain. Replenishment quantity of the retailer and the number of shipments from manufacturer to retailer are considered as the decision variables in the model. The objective of the proposed model is to demonstrate the optimality of the annual net revenue of the SC and the decision variables under nonlinear price-dependent demand. A numerical example is devised and the model is solved using the computer program written in MATLAB. Also, the sensitivity analysis is carried out to demonstrate the variation in the objective function with model parameters. From the findings of the research, it is concluded that with centralised decisions, percentage increase in the optimality of the annual net revenue of the SC decreases with manufacturer's unit cost whereas increases with retailer's unit cost.

Keywords: two-echelon inventory system; mathematical model; transportation cost; number of shipments; nonlinear price dependent demand. (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=89792 (text/html)
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:ids:ijlsma:v:29:y:2018:i:3:p:374-398

Access Statistics for this article

More articles in International Journal of Logistics Systems and Management from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().