Research on Decentralized Supply Chain with Channel-Wide Profit Maximization
Science Journal of Business and Management
Volume 5, Issue 4, August 2017, Pages: 132-135
Received: Jun. 12, 2017; Published: Jun. 14, 2017
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Authors
Liang-Tu Chen, Department of Commerce Automation and Management, National Pingtung University, Pingtung, Taiwan ROC
Shih-Wen Chien, Department of Information Management, National Kaohsiung University of Applied Sciences, Kaohsiung, Taiwan ROC
Chun-Chin Wei, Department of Marketing and Distribution Management, Chien-Hsin University, Chungli, Taiwan ROC
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Abstract
This study explores the problem of optimally dynamic joint decisions: replenishment quantity, retail price and depletion time, in a vertically decentralized single-retailer and single-supplier supply chain over a dynamic multi-period planning horizon, subject to multivariate demand function and deteriorating goods with shortages allowed and with no consideration of fixed costs. This research uses a calculus-based formulation coupled with dynamic programming techniques to solve the channel-wide profit maximization under price-only contract and consignment contract respectively. The analysis reveals that the consignment contract can significantly achieve higher channel-wide profit than the price-only contract for the dynamic decentralized channel.
Keywords
Decentralized Supply Chain, Dynamic Pricing, Shortages, Fixed Costs
To cite this article
Liang-Tu Chen, Shih-Wen Chien, Chun-Chin Wei, Research on Decentralized Supply Chain with Channel-Wide Profit Maximization, Science Journal of Business and Management. Vol. 5, No. 4, 2017, pp. 132-135. doi: 10.11648/j.sjbm.20170504.11
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