Abstract:
This paper considers a risk neutral, two-stage, supply chain with one manufacturer and one retailer. The retailer's demand depends on initial stock levels and product pri...Show MoreMetadata
Abstract:
This paper considers a risk neutral, two-stage, supply chain with one manufacturer and one retailer. The retailer's demand depends on initial stock levels and product price at the store. Retailer's order quantity is limited by manufacturer's capacity. This paper proposes a centralized setting and three decentralized settings with revenue sharing contract, markdown policy and a combined contract. Numerical analysis shows that the retailer's expected profit is higher in markdown policy with respect to revenue sharing and vice versa for the manufacturer. For retailers who prefer revenue sharing mechanism due to lower initial expense, the combined contract improves the total expected profit. Sensitivity analysis shows that stock dependency and demand uncertainty are inversely proportional to the supply-chain performance, while increase in price sensitivity and capacity of the plant, improve the overall supply-chain performance.
Published in: 2019 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM)
Date of Conference: 15-18 December 2019
Date Added to IEEE Xplore: 03 February 2020
ISBN Information: