Title: Coordinating a three level supply chain in a price-sensitive demand environment

Authors: Santanu Sinha, S.P. Sarmah

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

Abstract: Supply chain coordination is one of the important issues in supply chain management. In the literature, quite a good number of models have been developed to coordinate two-stage supply chain under different situations. However, there has been little research on modelling supply chain coordination in more than two stages. In this paper, we have developed a three-level coordination model with price sensitive market demand and variable production rate of the manufacturer. An all-unit quantity discount scheme is used to coordinate the entire channel and a mechanism is proposed to share the coordination benefit based on the relative bargaining power of each channel member. Finally, a numerical study is carried out to illustrate the efficacy of the model.

Keywords: supply chain coordination; quantity discount; price-sensitive demand; supply chain management; SCM; modelling.

DOI: 10.1504/IJOR.2010.035045

International Journal of Operational Research, 2010 Vol.9 No.2, pp.205 - 226

Published online: 01 Sep 2010 *

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