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A production-inventory model for a two-echelon supply chain when demand is dependent on sales teams׳ initiatives

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  • Cárdenas-Barrón, Leopoldo Eduardo
  • Sana, Shib Sankar

Abstract

This paper investigates the issue of channel coordination for a two echelon supply chain consisting of one manufacturer and one retailer. In this supply chain, the demand is sensitive to promotional efforts/sales teams׳ initiatives. A production-inventory model is developed that considers the procurement cost per unit as a function of the production rate. To resolve the issues of channel coordination and promotion-based demand, a variety of centralized coordinating systems are explored. An analytical method is employed to achieve optimal production rate, production lot size, backlogging and the initiatives of sales teams so that the profits of both manufacturer and retailer are maximized. Some numerical examples are solved in order to better understand the proposed production-inventory model. The results of a sensitivity analysis are also provided. Finally, some conclusions and future researches are included.

Suggested Citation

  • Cárdenas-Barrón, Leopoldo Eduardo & Sana, Shib Sankar, 2014. "A production-inventory model for a two-echelon supply chain when demand is dependent on sales teams׳ initiatives," International Journal of Production Economics, Elsevier, vol. 155(C), pages 249-258.
    • Handle: RePEc:eee:proeco:v:155:y:2014:i:c:p:249-258
    DOI: 10.1016/j.ijpe.2014.03.007
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    4. Manoranjan De & Barun Das & Manoranjan Maiti, 2016. "EPL models for complementary and substitute items under imperfect production process with promotional cost and selling price dependent demands," OPSEARCH, Springer;Operational Research Society of India, vol. 53(2), pages 259-277, June.
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    8. Nita H. Shah & Urmila Chaudhari & Mrudul Y. Jani, 2019. "Effect of manufacturer’s innovation and retailer’s promotion under trapezoidal demand with centralized and decentralized options," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 27(1), pages 55-69, April.
    9. Emad Sane-Zerang & Jafar Razmi & Ata Allah Taleizadeh, 2020. "Coordination in a closed-loop supply chain under asymmetric and symmetric information with sales effort-dependent demand," Journal of Business Economics, Springer, vol. 90(2), pages 303-334, March.
    10. Mowmita Mishra & Soumya Kanti Hota & Santanu Kumar Ghosh & Biswajit Sarkar, 2020. "Controlling Waste and Carbon Emission for a Sustainable Closed-Loop Supply Chain Management under a Cap-and-Trade Strategy," Mathematics, MDPI, vol. 8(4), pages 1-24, March.
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    12. Ata Allah Taleizadeh, 2017. "Stochastic Multi-Objectives Supply Chain Optimization with Forecasting Partial Backordering Rate: A Novel Hybrid Method of Meta Goal Programming and Evolutionary Algorithms," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 34(04), pages 1-28, August.
    13. Vandana & S. R. Singh & Dharmendra Yadav & Biswajit Sarkar & Mitali Sarkar, 2021. "Impact of Energy and Carbon Emission of a Supply Chain Management with Two-Level Trade-Credit Policy," Energies, MDPI, vol. 14(6), pages 1-19, March.
    14. Rubi Das & Abhijit Barman & Pijus Kanti De, 2022. "Integration of pricing and inventory decisions of deteriorating item in a decentralized supply chain: a Stackelberg-game approach," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 13(1), pages 479-493, February.
    15. Nikunja Mohan Modak & Shibaji Panda & Shib Sankar Sana, 2015. "Managing a two-echelon supply chain with price, warranty and quality dependent demand," Cogent Business & Management, Taylor & Francis Journals, vol. 2(1), pages 1011014-101, December.
    16. Sarkar, Biswajit & Sarkar, Mitali & Ganguly, Baishakhi & Cárdenas-Barrón, Leopoldo Eduardo, 2021. "Combined effects of carbon emission and production quality improvement for fixed lifetime products in a sustainable supply chain management," International Journal of Production Economics, Elsevier, vol. 231(C).
    17. Hanukov, Gabi, 2022. "A service system where junior servers approach a senior server on behalf of customers," International Journal of Production Economics, Elsevier, vol. 244(C).
    18. Arpita Roy & Shib Sankar Sana & Kripasindhu Chaudhuri, 2018. "Optimal Pricing of competing retailers under uncertain demand-a two layer supply chain model," Annals of Operations Research, Springer, vol. 260(1), pages 481-500, January.
    19. M. Palanivel & R. Uthayakumar, 2017. "A production-inventory model with promotional effort, variable production cost and probabilistic deterioration," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(1), pages 290-300, January.
    20. Chen, Tsung-Hui, 2017. "Optimizing pricing, replenishment and rework decision for imperfect and deteriorating items in a manufacturer-retailer channel," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 539-550.
    21. Sarkar, Biswajit & Ganguly, Baishakhi & Sarkar, Mitali & Pareek, Sarla, 2016. "Effect of variable transportation and carbon emission in a three-echelon supply chain model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 112-128.
    22. Tal Avinadav & Tatyana Chernonog & Yael Lahav & Uriel Spiegel, 2017. "Dynamic pricing and promotion expenditures in an EOQ model of perishable products," Annals of Operations Research, Springer, vol. 248(1), pages 75-91, January.
    23. Sarkar, Biswajit & Guchhait, Rekha & Sarkar, Mitali & Cárdenas-Barrón, Leopoldo Eduardo, 2019. "How does an industry manage the optimum cash flow within a smart production system with the carbon footprint and carbon emission under logistics framework?," International Journal of Production Economics, Elsevier, vol. 213(C), pages 243-257.

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