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An integrated vendor-buyer model with stock-dependent demand

Author

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

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.

Suggested Citation

  • Sajadieh, Mohsen S. & Thorstenson, Anders & Jokar, Mohammad R. Akbari, 2010. "An integrated vendor-buyer model with stock-dependent demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(6), pages 963-974, November.
    • Handle: RePEc:eee:transe:v:46:y:2010:i:6:p:963-974
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    Citations

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    Cited by:

    1. S. K. Karuppasamy & R. Uthayakumar, 2019. "Coordination of a three-level supply chain with variable demand and order size dependent trade credit in healthcare industries," 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. 10(2), pages 285-298, April.
    2. Beatriz Abdul-Jalbar & Roberto Dorta-Guerra & José M. Gutiérrez & Joaquín Sicilia, 2021. "Production/Inventory Policies for a Two-Echelon System with Credit Period Incentives," Mathematics, MDPI, vol. 9(15), pages 1-25, July.
    3. Lee, Shine-Der & Fu, Yen-Chen, 2014. "Joint production and delivery lot sizing for a make-to-order producer–buyer supply chain with transportation cost," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 66(C), pages 23-35.
    4. Sudarshan Bardhan & Haimanti Pal & Bibhas Chandra Giri, 2019. "Optimal replenishment policy and preservation technology investment for a non-instantaneous deteriorating item with stock-dependent demand," Operational Research, Springer, vol. 19(2), pages 347-368, June.
    5. Sajadieh, Mohsen S. & Larsen, Christian, 2015. "A coordinated manufacturer-retailer model under stochastic demand and production rate," International Journal of Production Economics, Elsevier, vol. 168(C), pages 64-70.
    6. M. Ganesh Kumar & R. Uthayakumar, 2019. "A two-echelon integrated inventory model under generalized lead time distribution with variable backordering rate," 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. 10(4), pages 552-562, August.
    7. Sarker, Bhaba R. & Rochanaluk, Ratkrit & Yi, Huizhi & Egbelu, Pius J., 2014. "An operational policy for a three-stage distributive supply chain system with retailers’ backorders," International Journal of Production Economics, Elsevier, vol. 156(C), pages 332-345.
    8. Glock, Christoph H., 2012. "The joint economic lot size problem: A review," International Journal of Production Economics, Elsevier, vol. 135(2), pages 671-686.
    9. Lee, W. & Wang, S.-P. & Chen, W.-C., 2017. "Forward and backward stocking policies for a two-level supply chain with consignment stock agreement and stock-dependent demand," European Journal of Operational Research, Elsevier, vol. 256(3), pages 830-840.
    10. Yang, Shuai & Hong, Ki-sung & Lee, Chulung, 2014. "Supply chain coordination with stock-dependent demand rate and credit incentives," International Journal of Production Economics, Elsevier, vol. 157(C), pages 105-111.
    11. Lihao Lu & Jianxiong Zhang & Wansheng Tang, 2016. "Optimal dynamic pricing and replenishment policy for perishable items with inventory-level-dependent demand," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(6), pages 1480-1494, April.
    12. Sana, Shib Sankar, 2012. "A collaborating inventory model in a supply chain," Economic Modelling, Elsevier, vol. 29(5), pages 2016-2023.
    13. Sajadieh, Mohsen S. & Fallahnezhad, Mohammad Saber & Khosravi, Maryam, 2013. "A joint optimal policy for a multiple-suppliers multiple-manufacturers multiple-retailers system," International Journal of Production Economics, Elsevier, vol. 146(2), pages 738-744.
    14. Lin, Feng & Jia, Tao & Wu, Feng & Yang, Zhen, 2019. "Impacts of two-stage deterioration on an integrated inventory model under trade credit and variable capacity utilization," European Journal of Operational Research, Elsevier, vol. 272(1), pages 219-234.

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