Channel coordination and volume discounts with price-sensitive demand

Qin, Yiyan; Huan-wen, Tang; Guo, Chonghui

doi:10.1016/j.ijpe.2006.02.005

Cited by 107 publications

(35 citation statements)

References 31 publications

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“…Li and Liu (2006) developed a supplier-buyer supply chain system with quantity discount and probabilistic customer demand. Qin et al (2007) Established a supply chain system consisting of a supplier and a buyer with volume discounts and price-sensitive demand. More research papers dealing with the quantity discount problem in a supply chain system can be found in Parlar and Wang (1994), Li and Huang (1995), Hofmann (2000), Yang (2004), Tsai (2007), Sheen and Tsao (2007), Burke et al (2008), etc., and the references therein.…”

Section: Literature Reviewmentioning

confidence: 99%

A single-vendor and a single-buyer integrated inventory model with ordering cost reduction dependent on lead time

Vijayashree

Uthayakumar

2017

J Ind Eng Int

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Lead time is one of the major limits that affect planning at every stage of the supply chain system. In this paper, we study a continuous review inventory model. This paper investigates the ordering cost reductions are dependent on lead time. This study addressed two-echelon supply chain problem consisting of a single vendor and a single buyer. The main contribution of this study is that the integrated total cost of the single vendor and the single buyer integrated system is analyzed by adopting two different (linear and logarithmic) types ordering cost reductions act dependent on lead time. In both cases, we develop effective solution procedures for finding the optimal solution and then illustrative numerical examples are given to illustrate the results. The solution procedure is to determine the optimal solutions of order quantity, ordering cost, lead time and the number of deliveries from the single vendor and the single buyer in one production run, so that the integrated total cost incurred has the minimum value. Ordering cost reduction is the main aspect of the proposed model. A numerical example is given to validate the model. Numerical example solved by using Matlab software. The mathematical model is solved analytically by minimizing the integrated total cost. Furthermore, the sensitivity analysis is included and the numerical examples are given to illustrate the results. The results obtained in this paper are illustrated with the help of numerical examples. The sensitivity of the proposed model has been checked with respect to the various major parameters of the system. Results reveal that the proposed integrated inventory model is more applicable for the supply chain manufacturing system. For each case, an algorithm procedure of finding the optimal solution is developed. Finally, the graphical representation is presented to illustrate the proposed model and also include the computer flowchart in each model.

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Section: Literature Reviewmentioning

confidence: 99%

A single-vendor and a single-buyer integrated inventory model with ordering cost reduction dependent on lead time

Vijayashree

Uthayakumar

2017

J Ind Eng Int

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“…Beyond Marketing Science, the topic of managing channel profits that mentions our early work continues to grow with recent publications in many journals, including the European Journal of Operational Research (Sarmah et al 2006), the European Journal of Operational Research (Zhou 2007), Industrial Marketing Management (Chen et al 2006, Zerbini andCastaldo 2007), the International Journal of Integrated Supply Management (Joglekar et al 2006), the International Journal of Production Economics (Xiao et al 2007), the Journal of Marketing Research (Chu et al 2007), the Journal of Operational Research (Lau et al 2007), the Journal of Operations Management (Barratt and Oke 2007), the Journal of Optimization Theory and Applications (He et al 2006), the Journal of Production Economics (Qin et al 2007), the Journal of Retailing (Dong et al 2007), Management Science (Ghosh and Balachander 2007), Marketing Science (Moorthy 2005), Production and Operations Management (Cattani et al 2006), Quantitative Marketing and Economics (Bhardwaj and Balasubramanian 2005), and Systems Engineering Society of China (Xu et al 2003) We are very proud to have contributed in a small way to making channels of distribution one of the most active areas of research in marketing today. Theoretical work abounds using the powerful methodology of equilibrium analysis, but empirical work is increasing as well.…”

Section: Academic Literaturementioning

confidence: 99%

Commentary—Managing Channel Profits

Jeuland

Shugan

2008

Marketing Science

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Channel coordination and, more generally, coordination of activities between interdependent economic agents is even more important today than when the paper was published more than 20 years ago. One reason is the trend toward globalization and outsourcing caused, in part, by the development of increasingly complex products and services that integrate many different competencies. Coordination today involves all the aspects of the marketing mix: product design coordination, price and service coordination (the focus of “Managing Channel Profits”), coordination of availability in highly hybrid distribution systems to better reach an increasingly complex and fragmented market, and coordination of communication with the target market. “Managing Channel Profits” argues a tendency toward a lack of coordination without explicit institutional arrangements and coordination mechanisms such as quantity discounts and contracts to solve the problem. The price and service coordination ideas of “Managing Channel Profits” have been successfully applied for 25 years of developments in marketing of revenue- and cost-sharing arrangements between increasingly interdependent market participants.

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“…Considering probabilistic demand and using quantity discount policy, Li and Liu (2006) proposed a model to achieve coordination between the vendor and the buyer. Qin et al (2007) developed a single vendor single buyer integrated inventory model considering volume discount, franchise fees and price sensitive demand. Sajadieh et al (2009) proposed another single vendor single buyer supply chain model in which the vendor delivers the production batch to the buyer in equal shipments and the lead time is stochastic.…”

Section: Introductionmentioning

confidence: 99%