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Studying a Two-level Supply Chain Including a Manufacturer and Several Retailers with a Wholesale Price Contract between Them

Author

Listed:
  • Fezzeh Abanavaz

    (Industrial Engineering, PNU, Shemiranat Branch, Tehran, Iran)

  • Morteza Khakzar Bafruei

    (Faculty of Engineering, University of Science and Culture, Technology Development Institute (ACECR), Tehran, Iran)

Abstract

As competition has intensified in today’s market, most of companies have understood that their business performance is highly dependent on the degree of cooperation and coordination in the supply chain. One of the factors causing supply chain coordination is the wholesale price contract. In this study, a two-level supply chain including a producer and several retailers that wholesale price contract is established among them. First, to construct the initial model, the library method is used to make the primary model and then, mathematical methods are used to construct the model. The final goal of this study is to determine the optimum order quantity and optimal production cost and maximizes the supply chain profit in a single-period model with a random demand market. Also, the case where the exchange of goods between retailers is justified under the conditions of shortage and surplus, and retailers are co-operating with each other is also examined.

Suggested Citation

  • Fezzeh Abanavaz & Morteza Khakzar Bafruei, 2020. "Studying a Two-level Supply Chain Including a Manufacturer and Several Retailers with a Wholesale Price Contract between Them," International Review of Management and Marketing, Econjournals, vol. 10(5), pages 165-171.
    • Handle: RePEc:eco:journ3:2020-05-20
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    References listed on IDEAS

    as
    1. Sana, Shib Sankar, 2013. "Optimal contract strategies for two stage supply chain," Economic Modelling, Elsevier, vol. 30(C), pages 253-260.
    2. Gérard P. Cachon, 2004. "The Allocation of Inventory Risk in a Supply Chain: Push, Pull, and Advance-Purchase Discount Contracts," Management Science, INFORMS, vol. 50(2), pages 222-238, February.
    3. Chen, Jing, 2011. "Returns with wholesale-price-discount contract in a newsvendor problem," International Journal of Production Economics, Elsevier, vol. 130(1), pages 104-111, March.
    4. Kaur Arshinder & Arun Kanda & S. G. Deshmukh, 2011. "A Review on Supply Chain Coordination: Coordination Mechanisms, Managing Uncertainty and Research Directions," International Handbooks on Information Systems, in: Tsan-Ming Choi & T.C. Edwin Cheng (ed.), Supply Chain Coordination under Uncertainty, pages 39-82, Springer.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Supply Chain; Pricing Chain And Order Quantity; Coalition of the Retailers; Problem of the Newsvendor;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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