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Coordinating Two-Echelon Supply Chains Under Stock And Price Dependent Demand Rate

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  • SHIBAJI PANDA

    (Department of Mathematics, Bengal Institute of Technology, 1.no. Govt. Colony, Kolkata-700150, West Bengal, India)

Abstract

Coordination is imperative for improving supply chain performance. In this paper, we focus on coordination of a two-echelon supply chain consisting of a manufacturer and a price-setting retailer, which operates for a single product. Customer demand is influenced by retailer's instantaneous inventory level and selling price. The integrated system and the decentralized scenario, by considering manufacturer as the Stackelberg leader, are discussed. It is shown that conventional revenue sharing contract cannot coordinate the system but revenue and cost sharing (RCS) contract is able to coordinate the system and leads to a win–win outcome. The key contract parameters — cost sharing fraction, along with revenue sharing fraction and wholesale price are determined under explicit and implicit information of retailer's cost structure. Finally, it is shown that range of cost sharing fraction that leads to win–win situation is independent of the format of cost structure of retailer. Numerical examples are provided to illustrate the development of the model.

Suggested Citation

  • Shibaji Panda, 2013. "Coordinating Two-Echelon Supply Chains Under Stock And Price Dependent Demand Rate," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 30(02), pages 1-20.
    • Handle: RePEc:wsi:apjorx:v:30:y:2013:i:02:n:s0217595912500510
    DOI: 10.1142/S0217595912500510
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    Citations

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    Cited by:

    1. Mohammad Reza Gholamian & Mahdi Ebrahimzadeh-Afruzi, 2021. "Credit and discount incentive options for two-level supply chain coordination, under uncertain price-dependent demand," Operational Research, Springer, vol. 21(4), pages 2283-2307, December.
    2. Xia Zhao & Ning Li & Liang Song, 2019. "Coordination of a Socially Responsible Two-Stage Supply Chain Under Random Demand," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 36(05), pages 1-27, October.
    3. Saha, S. & Goyal, S.K., 2015. "Supply chain coordination contracts with inventory level and retail price dependent demand," International Journal of Production Economics, Elsevier, vol. 161(C), pages 140-152.
    4. Pan Liu & Shu-ping Yi, 2018. "A study on supply chain investment decision-making and coordination in the Big Data environment," Annals of Operations Research, Springer, vol. 270(1), pages 235-253, November.
    5. 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.
    6. Wensi Zhang & Jinlin Li & Ran Zhang & Yahong Chen, 2017. "Impact of Emergency Order in Price-Dependent Newsvendor Problems," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 34(02), pages 1-20, April.
    7. Modak, Nikunja Mohan & Panda, Shibaji & Sana, Shib Sankar, 2016. "Three-echelon supply chain coordination considering duopolistic retailers with perfect quality products," International Journal of Production Economics, Elsevier, vol. 182(C), pages 564-578.
    8. Narayan Mishra & Sri Vanamalla Venkataraman, 2022. "Optimal order quantity in the presence of strategic customers," Annals of Operations Research, Springer, vol. 315(2), pages 1871-1894, August.
    9. 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).
    10. Bin Shen & Hau-Ling Chan, 2017. "Forecast Information Sharing for Managing Supply Chains in the Big Data Era: Recent Development and Future Research," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 34(01), pages 1-26, February.
    11. Panda, Shibaji, 2014. "Coordination of a socially responsible supply chain using revenue sharing contract," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 67(C), pages 92-104.

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