Centralized Decisions for a Two-Stage Supply Chain with Price-Discount Dependent Demand

2018 ◽  
Vol 6 (3) ◽  
pp. 249-259
Author(s):  
Xiyang Hou ◽  
Yongjiang Guo
Keyword(s):  
Supply Chain ◽  
Demand Uncertainty ◽  
Production Capacity ◽  
Selling Price ◽  
Price Discount ◽  
Two Stage ◽  
Demand Information ◽  
Historic Data ◽  
Stage 1 ◽  
Dependent Demand

Abstract In this paper, we study a centralized supply chain for a two-stage with selling price discount. This supply chain consists of a supplier and a retailer. Based on the feature that the product’s selling season is short and the supply chain faces great demand uncertainty. We consider a two-stage scenario where, at the beginning of stage 1, the supplier reserves production capacity based on historic data in advance, stage 2 comes to us after some leadtime, both the supplier and the retailer update the demand information, the retailer then places an order not exceeding the reserved capacity based on the selling-pricing discount dependent demand. We make optimal decisions on the reserved capacity in stage 1, selling price discount and order quantity in stage 2. In this supply chain, the pattern in stage 2 is figured out first, and then stage 1 is cleared as well. Then we present a numerical example to give some insights. Finally we get some conclusions.

Service capacity coordination in IT services supply chain

2018 ◽  
Vol 13 (4) ◽  
pp. 952-972 ◽  
Author(s):  
Sanjay Kumar Prasad ◽  
Ravi Shankar
Keyword(s):  
Supply Chain ◽  
Demand Uncertainty ◽  
Degree Of Substitution ◽  
Future Research ◽  
It Services ◽  
Two Stage ◽  
Content Type ◽  
Optimal Capacity ◽  
Automated Software ◽  
Capacity Cost

Purpose The purpose of this paper is to investigate capacity coordination in services supply chain (SSC). It provides discussion and application of various contracts in a two-stage single period SSC. Design/methodology/approach This paper considers a two-stage serial supply chain with demand uncertainty and price insensitivity. A model is developed to represent a global IT SSC incorporating services specific factors like over-capacity cost and higher degree of substitution resulting in flexibility to meet unplanned demand. At first, centralized and competitive solutions of the model are studied. Then, the paper studies coordination in this supply chain using some of widely used contract templates. Findings This paper finds several key insights for the researchers and practitioners in this area around adverse impact of over-capacity cost on demand, positive effect of delivery team’s exposure to market on contracting terms and better understanding of efficient frontiers for selected contracting mechanism. Research limitations/implications This paper has limited its analysis to three key and most widely used contracts and made assumptions about risk-neutrality of the firms. Future research can study other contracting templates and/or relax for the model as laid out in this paper. Practical implications An automated software agent can be built leveraging the closed form equations developed here to help decide on optimal capacity investment and devise coordinating contracts. Originality/value This paper established that because of higher degree of substitution, perishability and non-trivial over-capacity cost, SSC behave bit differently than the physical goods supply chain and coordination of participating firms needs to be studied in a services specific context for improving system-wide performance.

scholarly journals Dynamic Pricing in a Multi-Period Newsvendor Under Stochastic Price-Dependent Demand

Mathematics ◽  
2019 ◽  
Vol 7 (6) ◽  
pp. 520 ◽  
Author(s):  
Mehran Ullah ◽  
Irfanullah Khan ◽  
Biswajit Sarkar
Keyword(s):  
Dynamic Pricing ◽  
Demand Uncertainty ◽  
New Technologies ◽  
Rapid Development ◽  
Life Cycles ◽  
Selling Price ◽  
Market Demand ◽  
Newsvendor Model ◽  
Pricing Policy ◽  
Dependent Demand

The faster growth of technology stipulates the rapid development of new products; with the spread of new technologies old ones are outdated and their market demand declines sharply. The combined impact of demand uncertainty and short life-cycles complicate ordering and pricing decision of retailers that leads to a decrease in the profit. This study deals with the joint inventory and dynamic pricing policy for such products considering stochastic price-dependent demand. The aim is to develop a discount policy that enables the retailer to order more at the start of the selling season thus increase the profit and market share of the retailer. A multi-period newsvendor model is developed under the distribution-free approach and the optimal stocking quantities, unit selling price, and the discount percentage are obtained. The results show that the proposed discount policy increases the expected profit of the system. Additionally, the stocking quantity and the unit selling price also increases in the proposed discount policy. The robustness of the proposed model is illustrated with numerical examples and sensitivity analysis. Managerial insights are given to extract significant insights for the newsvendor model with discount policy.

Two Stage Supply Chain Optimization for Perishable Products Under Fuzzy Environment

2019 ◽  
Vol 8 (3) ◽  
pp. 31-48
Author(s):  
Sandhya Makkar
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Supply Chain Coordination ◽  
Supply Chain Optimization ◽  
Coordination Problem ◽  
Two Stage ◽  
Chain Management ◽  
Fuzzy Environment ◽  
Demand Information ◽  
The One

In the changing market scenario, supply chain management is getting phenomenal importance amongst researchers. Studies on supply chain management have emphasized the vitality of a long-term strategic relationship between the supplier, distributor and retailer. In this article, the authors have studied a two-stage supply chain coordination problem under uncertain costs and demand information when integrated procurement and distribution decisions of supply chain has to be employed. The model incorporates a single supplier transporting its products to multiple destinations of a retailer. This process becomes tedious, as when items have an inventory carrying cost incurred due to perishable nature of products. Different discount policies are offered to procure and transport goods from the one stage to other stage. Fuzzy set theory is applied to estimate the uncertainty associated with the input parameters and triangular fuzzy numbers are used to analyze the model. A case is presented to validate the procedure.

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