A two-echelon supply chain coordination with quantity discount incentive for fixed lifetime product in a fuzzy environment

K. F. Mary Latha () and R. Uthayakumar ()
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K. F. Mary Latha: Jayaraj Annapackiam College for Women (Autonomous)
R. Uthayakumar: Gandhigram Rural Institute - Deemed University

International Journal of System Assurance Engineering and Management, 2017, vol. 8, issue 2, No 52, 1194-1208

Abstract: Abstract Efficient and effective management of a supply chain is of great importance for the success of the digital economy. Coordination among the members of a supply chain play a vital role for its effective management. The members of the supply chain may agree to cooperate initially, but owing to the competition prevailing in business environments, they may be tempted to maximize their profits and deviate from any agreement. So, effective mechanism is essential to enforce coordination among the members in a supply chain. In today’s competitive environment, the inventory managers are also interested in simple and easy procedures to apply them in their organizations. This paper investigates a single-manufacturer and a single-buyer two echelon supply chain model for a fixed lifetime product in a fuzzy cost environment with a quantity discount strategy as a coordination mechanism. Crisp models are developed under different scenarios (1) without coordination (2) with coordination and (3) system optimization. Fuzzy models are also formulated by representing the ordering cost and the holding cost of the manufacturer by trapezoidal fuzzy numbers. Signed distance method is adopted for defuzzification. Numerical results highlighting the sensitivity of various parameters are also elucidated.

Keywords: Supply chain coordination; Inventory; Quantity discount; Fixed lifetime product; Fuzzy numbers; Signed distance method (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s13198-017-0587-7

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