Pricing and ordering policies for price-dependent demand in a supply chain of a single retailer and a single manufacturer. (English) Zbl 1386.90016

Summary: This article discusses joint pricing and ordering policies for price-dependent demand in a supply chain consisting of a single retailer and a single manufacturer. The retailer places orders for products according to an EOQ policy and the manufacturer produces them on a lot-for-lot basis. Four mechanisms with differing levels of coordination are presented. Mathematical models are formulated and solution procedures are developed to determine the optimal retail prices and order quantities. Through extensive numerical experiments, we analyse and compare the behaviours and characteristics of the proposed mechanisms, and find that enhancing the level of coordination has important benefits for the supply chain.


90B06 Transportation, logistics and supply chain management
90B05 Inventory, storage, reservoirs
91B24 Microeconomic theory (price theory and economic markets)
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