Marzieh Karimi; Hasan Khademi zare; Yahia Zare Mehrjerdi; Mohammad-Bagher Fakhrzad
Abstract
Vendor-managed inventory (VMI) is a popular inventory management system that allows a vendor to access sales data and manage inventory levels for his retailers. The formulation of service level and pricing decisions are finite in the VMI model literature. The study examines how a manufacturer and its ...
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Vendor-managed inventory (VMI) is a popular inventory management system that allows a vendor to access sales data and manage inventory levels for his retailers. The formulation of service level and pricing decisions are finite in the VMI model literature. The study examines how a manufacturer and its retailer communicate with one another to optimize their net profits through modifying service level, pricing, and inventory policy in a VMI system employing a Stackelberg game. The manufacturer produces a product and distributes it to several retailers at a similar wholesale price. The retailers subsequently offer the product at retail pricing in independent marketplaces. The Cobb-Douglas demand function could characterize the demand rate in every market, which is an enhancing function of the service level, however, a reducing function of retail prices. The manufacturer selects its wholesale pricing, replenishment cycles, backorder amount, and binary variable for production capacity to optimize profit. Retailers determine retail pricing and service levels so that they may optimize their profitability. Solution procedures are evolved for finding the Stackelberg game equilibrium from which no firm is inclined to deviate from maximizing its profit. The balance benefits the manufacturer while increasing the revenues of the retailers. If the retailers are prepared to engage with the manufacturer via a cooperative contract, the equilibrium could be enhanced to the advantage of both the manufacturer and his retailers. Ultimately, a numerical example is shown, along with the appropriate sensitivity analysis, to demonstrate that. 1) In certain circumstances, the manufacturer might benefit from his leadership and monopolize the additional profit generated by the VMI system. 2) The manufacturer's profit, and later the retailers' profit, could be increased more by the cooperative contract, in comparison to the Stackelberg equilibrium; 3) Market-related parameters have a substantial impact on the net profit of any enterprise.
Behrooz Khorshidvand; Hamed Soleimani; Mir Mehdi Seyyed Esfahani; Soheil Sibdari
Abstract
This paper addresses a novel two-stage model for a Sustainable Closed-Loop Supply Chain (SCLSC). This model, as a contribution, provides a balance among economic aims, environmental concerns, and social responsibilities based on price, green quality, and advertising level. Therefore, in the first stage, ...
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This paper addresses a novel two-stage model for a Sustainable Closed-Loop Supply Chain (SCLSC). This model, as a contribution, provides a balance among economic aims, environmental concerns, and social responsibilities based on price, green quality, and advertising level. Therefore, in the first stage, the optimal values of price are derived by considering the optimal level of advertising and greening. After that, in the second stage, multi-objective Mixed-Integer Linear Programming (MOMILP) is extended to calculate Pareto solutions. The objectives are include maximizing the profit of the whole chain, minimizing the environmental impacts due to CO2 emissions, and maximizing employee safety. Besides, a Lagrangian relaxation algorithm is developed based on the weighted-sum method to solve the MOMILP model. The findings demonstrate that the proposed two-stage model can simultaneously cope with coordination decisions and sustainable objectives. The results show that the optimal price of the recovered product equals 75% of the new product price which considerably encourages customers to buy it. Moreover, to solve the MOMILP model, the proposed algorithm can reach to exact bound with an efficiency gap of 0.17% compared to the optimal solution. Due to the use of this algorithm, the solution time of large-scale instances is reduced and simplified by an average of 49% in comparison with the GUROBI solver.
M. Johari; S.M. Hosseini Motlagh; M.R. Nematollahi
Volume 3, Issue 2 , December 2016, , Pages 58-87
Abstract
In this paper, the coordination of pricing and periodic review inventory decisions in a supplier-retailer supply chain (SC) is proposed. In the investigated SC, the retailer faces a stochastic price dependent demand and determines the review period, order-up-to-level, and retail price. On the other hand, ...
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In this paper, the coordination of pricing and periodic review inventory decisions in a supplier-retailer supply chain (SC) is proposed. In the investigated SC, the retailer faces a stochastic price dependent demand and determines the review period, order-up-to-level, and retail price. On the other hand, the supplier decides on the replenishment multiplier. Firstly, the decentralized and centralized decision making models are established. Afterwards, a quantity discount contract as an incentive scheme is developed to coordinate the pricing and periodic review replenishment decisions simultaneously. The minimum and maximum discount factors, which are acceptable to both SC members, are determined. In addition, a set of numerical examples is conducted to demonstrate the performance of the proposed coordination model. The results demonstrate that the proposed coordination mechanism can improve the profitability of SC along with both the SC members in comparison with the decentralized model. In addition, the results revealed that the proposed incentive scheme is able to achieve channel coordination. Moreover, the coordination model can fairly share the surplus profits between SC members based on their bargaining power.