IDEAS home Printed from https://ideas.repec.org/a/ids/ijisma/v2y2006i1-2p28-48.html
   My bibliography  Save this article

Coordinating a three-level supply chain with price discounts, price dependent demand, and profit sharing

Author

Listed:
  • Mohamad Y. Jaber
  • Ibrahim H. Osman
  • Alfred L. Guiffrida

Abstract

This paper proposes a three-level (supplier-manufacturer-retailer) supply chain model with a profit sharing mechanism to maximise the supply chain profit. In this model, an all-unit price discounts scheme is used to coordinate the order quantities among the supply chain levels, and the demand at the retailer's end is assumed to be price dependent. To enhance the coordination in the supply chain, two profit-sharing scenarios are investigated. The semi-liberal scenario is based on increasing the quantity discount in order to generate more demands with which the most powerful player in the chain will get the highest fraction of additional profits. However, a strict mechanism is suggested to rectify the first scenario by dividing the coordination profits based on equal return on investments. Computational results are provided under different patterns of the players' order or set-up costs along the chain. Furthermore, the results show that the strict mechanism is the best mechanism for profit sharing among the players in the supply chain.

Suggested Citation

  • Mohamad Y. Jaber & Ibrahim H. Osman & Alfred L. Guiffrida, 2006. "Coordinating a three-level supply chain with price discounts, price dependent demand, and profit sharing," International Journal of Integrated Supply Management, Inderscience Enterprises Ltd, vol. 2(1/2), pages 28-48.
    • Handle: RePEc:ids:ijisma:v:2:y:2006:i:1/2:p:28-48
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=8337
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Panda, S. & Modak, N.M. & Basu, M. & Goyal, S.K., 2015. "Channel coordination and profit distribution in a social responsible three-layer supply chain," International Journal of Production Economics, Elsevier, vol. 168(C), pages 224-233.
    2. Ding, Huiping & Guo, Baochun & Liu, Zhishuo, 2011. "Information sharing and profit allotment based on supply chain cooperation," International Journal of Production Economics, Elsevier, vol. 133(1), pages 70-79, September.
    3. Jaber, M.Y. & Goyal, S.K., 2008. "Coordinating a three-level supply chain with multiple suppliers, a vendor and multiple buyers," International Journal of Production Economics, Elsevier, vol. 116(1), pages 95-103, November.
    4. Ventura, José A. & Bunn, Kevin A. & Venegas, Bárbara B. & Duan, Lisha, 2021. "A coordination mechanism for supplier selection and order quantity allocation with price-sensitive demand and finite production rates," International Journal of Production Economics, Elsevier, vol. 233(C).
    5. Chan, Chi Kin & Fang, Fei & Langevin, André, 2018. "Single-vendor multi-buyer supply chain coordination with stochastic demand," International Journal of Production Economics, Elsevier, vol. 206(C), pages 110-133.
    6. Cheng, Rong & Duan, Yongrui & Zhang, Jianguang & Ke, Hua, 2021. "Impacts of store-brand introduction on a multiple-echelon supply chain," European Journal of Operational Research, Elsevier, vol. 292(2), pages 652-662.
    7. Hosseini-Motlagh, Seyyed-Mahdi & Nematollahi, Mohammadreza & Johari, Maryam & Sarker, Bhaba R., 2018. "A collaborative model for coordination of monopolistic manufacturer's promotional efforts and competing duopolistic retailers' trade credits," International Journal of Production Economics, Elsevier, vol. 204(C), pages 108-122.
    8. Jaber, Mohamad Y. & Bonney, Maurice & Guiffrida, Alfred L., 2010. "Coordinating a three-level supply chain with learning-based continuous improvement," International Journal of Production Economics, Elsevier, vol. 127(1), pages 27-38, September.
    9. Wu, Chengfeng & Liu, Xin & Li, Annan, 2021. "A loss-averse retailer–supplier supply chain model under trade credit in a supplier-Stackelberg game," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 182(C), pages 353-365.
    10. Zanoni, Simone & Jaber, Mohamad Y. & Zavanella, Lucio E., 2012. "Vendor managed inventory (VMI) with consignment considering learning and forgetting effects," International Journal of Production Economics, Elsevier, vol. 140(2), pages 721-730.
    11. Ma, Xueli & Wang, Jian & Bai, Qingguo & Wang, Shuyun, 2020. "Optimization of a three-echelon cold chain considering freshness-keeping efforts under cap-and-trade regulation in Industry 4.0," International Journal of Production Economics, Elsevier, vol. 220(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijisma:v:2:y:2006:i:1/2:p:28-48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=81 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.