A Mathematical Model for Coordinating Decisions in Periodic Review Inventory Systems and Sharing the Profit in a twoechelon Decentralized Supply Chain, by Considering Quantity Discount Contract
Supply chain (SC) coordination is one of the major issues which has been considered in the investigations of supply chains. In this study, a twoechelon supply chain with one retailer and one supplier is considered. Demand is stochastic and has a normal distribution and lead time is assumed determin...
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Allameh Tabataba'i University Press
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doajbf7954e0fbc14a43aa8ff5a6c1dfb52a20201125T03:50:07ZfasAllameh Tabataba'i University PressMuṭāli̒āti Mudīriyyati Ṣan̒atī2251802920190401175228733810.22054/JIMS.2018.17520.1626A Mathematical Model for Coordinating Decisions in Periodic Review Inventory Systems and Sharing the Profit in a twoechelon Decentralized Supply Chain, by Considering Quantity Discount ContractMina Nouri Harzvili SeyyedMahdi HosseiniMotalghMohammadreza NematollahiSupply chain (SC) coordination is one of the major issues which has been considered in the investigations of supply chains. In this study, a twoechelon supply chain with one retailer and one supplier is considered. Demand is stochastic and has a normal distribution and lead time is assumed deterministic. The retailer uses a periodic review inventory system for his replenishment decisions and faces partial shortages. Review period and orderuptolevel are decision variables of the retailer. First, the optimized values of the variables in both decentralized and centralized decisionmaking structures are obtained. Although Centralized decision making increases the whole SC’s profitability, it reduces the profitability of the retailer in comparison with the decentralized model; In order to make centralized decisions and to encourage the retailer to change his decisions, a coordination model is proposed. Quantity discount contract is used as an incentive scheme in the coordinated model. For calculating the exact value of the discount factor in this contract, the both member’s profit is considered. Furthermore, to fairly share the extra profit achieved by the coordinated model, a profitsharing strategy, based on the bargaining power of the members, is proposed. A set of numerical experiments and sensitivity analysis, which is performed with respect to several key parameters of the study, reveal that, from economic viewpoint, the proposed coordination model for the supplierdistributor channel, can increase the channel profit up to its optimal profit level and guarantee the improvement of channel members’ profit in comparison with their profit under the decentralized model. From inventory management viewpoint, the proposed discount contract reduces the distributor’s inventory shortage risk. Moreover, results of evaluating the proposed model under high levels of demand uncertainty shows that the proposed model is capable of coordinating the SC under various conditions such as demand frequencies and high quantities of standard deviation of the demand http://jims.atu.ac.ir/article_9613_ac8cd0284b5d5c52b4c0830fe31bc353.pdftwoechelon decentralized supply chain supply chain coordination periodic review inventory systems quantity discount contract profitsharing strategy 
collection 
DOAJ 
language 
fas 
format 
Article 
sources 
DOAJ 
author 
Mina Nouri Harzvili SeyyedMahdi HosseiniMotalgh Mohammadreza Nematollahi 
spellingShingle 
Mina Nouri Harzvili SeyyedMahdi HosseiniMotalgh Mohammadreza Nematollahi A Mathematical Model for Coordinating Decisions in Periodic Review Inventory Systems and Sharing the Profit in a twoechelon Decentralized Supply Chain, by Considering Quantity Discount Contract Muṭāli̒āti Mudīriyyati Ṣan̒atī twoechelon decentralized supply chain supply chain coordination periodic review inventory systems quantity discount contract profitsharing strategy 
author_facet 
Mina Nouri Harzvili SeyyedMahdi HosseiniMotalgh Mohammadreza Nematollahi 
author_sort 
Mina Nouri Harzvili 
title 
A Mathematical Model for Coordinating Decisions in Periodic Review Inventory Systems and Sharing the Profit in a twoechelon Decentralized Supply Chain, by Considering Quantity Discount Contract 
title_short 
A Mathematical Model for Coordinating Decisions in Periodic Review Inventory Systems and Sharing the Profit in a twoechelon Decentralized Supply Chain, by Considering Quantity Discount Contract 
title_full 
A Mathematical Model for Coordinating Decisions in Periodic Review Inventory Systems and Sharing the Profit in a twoechelon Decentralized Supply Chain, by Considering Quantity Discount Contract 
title_fullStr 
A Mathematical Model for Coordinating Decisions in Periodic Review Inventory Systems and Sharing the Profit in a twoechelon Decentralized Supply Chain, by Considering Quantity Discount Contract 
title_full_unstemmed 
A Mathematical Model for Coordinating Decisions in Periodic Review Inventory Systems and Sharing the Profit in a twoechelon Decentralized Supply Chain, by Considering Quantity Discount Contract 
title_sort 
mathematical model for coordinating decisions in periodic review inventory systems and sharing the profit in a twoechelon decentralized supply chain, by considering quantity discount contract 
publisher 
Allameh Tabataba'i University Press 
series 
Muṭāli̒āti Mudīriyyati Ṣan̒atī 
issn 
22518029 
publishDate 
20190401 
description 
Supply chain (SC) coordination is one of the major issues which has been considered in the investigations of supply chains. In this study, a twoechelon supply chain with one retailer and one supplier is considered. Demand is stochastic and has a normal distribution and lead time is assumed deterministic. The retailer uses a periodic review inventory system for his replenishment decisions and faces partial shortages. Review period and orderuptolevel are decision variables of the retailer. First, the optimized values of the variables in both decentralized and centralized decisionmaking structures are obtained. Although Centralized decision making increases the whole SC’s profitability, it reduces the profitability of the retailer in comparison with the decentralized model; In order to make centralized decisions and to encourage the retailer to change his decisions, a coordination model is proposed. Quantity discount contract is used as an incentive scheme in the coordinated model. For calculating the exact value of the discount factor in this contract, the both member’s profit is considered. Furthermore, to fairly share the extra profit achieved by the coordinated model, a profitsharing strategy, based on the bargaining power of the members, is proposed. A set of numerical experiments and sensitivity analysis, which is performed with respect to several key parameters of the study, reveal that, from economic viewpoint, the proposed coordination model for the supplierdistributor channel, can increase the channel profit up to its optimal profit level and guarantee the improvement of channel members’ profit in comparison with their profit under the decentralized model. From inventory management viewpoint, the proposed discount contract reduces the distributor’s inventory shortage risk. Moreover, results of evaluating the proposed model under high levels of demand uncertainty shows that the proposed model is capable of coordinating the SC under various conditions such as demand frequencies and high quantities of standard deviation of the demand

topic 
twoechelon decentralized supply chain supply chain coordination periodic review inventory systems quantity discount contract profitsharing strategy 
url 
http://jims.atu.ac.ir/article_9613_ac8cd0284b5d5c52b4c0830fe31bc353.pdf 
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