Title: Optimising pricing and inventory in a supply chain with supply-hub

Authors: Lei Xiao; Fei Lv

Addresses: School of Economics and Management, Wuhan University, Wuhan, Hubei, China ' School of Business Administration, Zhongnan University of Economics and Law, Wuhan, Hubei, China

Abstract: This paper focuses on joint decision making about pricing and inventory in a three level supply chain composed of multi suppliers, one supply-hub and one manufacturer. The problem is modelled as a three-stage game. Firstly, the manufacturer determines its margin. Secondly, the supply-hub determines its replenishment policy. Finally, each supplier determines its wholesale price, production lot size and delivery lot size to the supply-hub. An analytical and computational method is proposed to solve the game model. A numerical study has been conducted to demonstrate how the algorithm works and to understand the influences of decision variables and profits of the three entities, we draw some management insights through this study.

Keywords: supply-hub; three level supply chain; pricing; inventory.

DOI: 10.1504/IJCSM.2018.093157

International Journal of Computing Science and Mathematics, 2018 Vol.9 No.3, pp.247 - 257

Received: 11 Dec 2017
Accepted: 15 Jan 2018

Published online: 11 Jul 2018 *

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