Title: Single-vendor multi-buyer discount pricing model: an evolutionary computation-based approach

Authors: Santanu Sinha, S.P. Sarmah

Addresses: Department of Industrial Engineering and Management, Indian Institute of Technology, Kharagpur 721302, India. ' Department of Industrial Engineering and Management, Indian Institute of Technology, Kharagpur 721302, India

Abstract: In this paper, a single-vendor multi-buyer supply chain coordination problem through optimal discount pricing policy has been studied. The seller offers multiple pricing schedules to the buyers and each buyer selects a schedule that maximises the corresponding individual profit. The model considers the reaction of each buyer and ensures that the motivation of each buyer to select local optima can also lead to global optima with maximum channel profits. The results show that channel profit increases with the increase in the number of pricing schedules. An evolutionary computation-based technique has been proposed to solve the model. The model can find significant practical applicability towards solving industrial problems.

Keywords: common order interval; discount schedules; evolutionary computation; heterogeneous buyers; supply chain coordination; discount pricing models; supply chain management; SCM; channel profit.

DOI: 10.1504/IJOR.2010.033101

International Journal of Operational Research, 2010 Vol.8 No.1, pp.1 - 20

Published online: 08 May 2010 *

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