A quantity discount approach to supply chain coordination

2007 ◽  
Vol 180 (2) ◽  
pp. 601-616 ◽  
Author(s):  
Hojung Shin ◽  
W.C. Benton
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
Quantity Discount

scholarly journals Supply Chain Coordination under Trade Credit and Quantity Discount with Sales Effort Effects

2018 ◽  
Vol 2018 ◽  
pp. 1-15 ◽  
Author(s):  
Zhihong Wang ◽  
Shaofeng Liu
Keyword(s):  
Supply Chain ◽  
Analytical Model ◽  
Hybrid Model ◽  
Trade Credit ◽  
Supply Chain Coordination ◽  
Market Demand ◽  
Quantity Discount ◽  
Model Combining ◽  
Effort Effect

The purpose of this paper is to investigate the role of trade credit and quantity discount in supply chain coordination when the sales effort effect on market demand is considered. In this paper, we consider a two-echelon supply chain consisting of a single retailer ordering a single product from a single manufacturer. Market demand is stochastic and is influenced by retailer sales effort. We formulate an analytical model based on a single trade credit and find that the single trade credit cannot achieve the perfect coordination of the supply chain. Then, we develop a hybrid quantitative analytical model for supply chain coordination by coherently integrating incentives of trade credit and quantity discount with sales effort effects. The results demonstrate that, providing that the discount rate satisfies certain conditions, the proposed hybrid model combining trade credit and quantity discount will be able to effectively coordinate the supply chain by motivating retailers to exert their sales effort and increase product order quantity. Furthermore, the hybrid quantitative analytical model can provide great flexibility in coordinating the supply chain to achieve an optimal situation through the adjustment of relevant parameters to resolve conflict of interests from different supply chain members. Numerical examples are provided to demonstrate the effectiveness of the hybrid model.

scholarly journals Supply Chain Coordination with Variable Backorder, Inspections, and Discount Policy for Fixed Lifetime Products

2016 ◽  
Vol 2016 ◽  
pp. 1-14 ◽  
Author(s):  
Biswajit Sarkar
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
Channel Coordination ◽  
Quantity Discounts ◽  
Inventory Cost ◽  
Quantity Discount ◽  
Total Cost ◽  
Inspection Cost ◽  
Inventory Costs ◽  
Fixed Lifetime

This paper illustrates a channel coordination and quantity discounts between a vendor and a buyer with single-setup multi-delivery (SSMD) strategy to reduce the joint total cost among supply chain players. The benefit of the coordination between a buyer and a vendor is considered as the vendor requests to the buyer for changing the ordering quantity such that the vendor can be benefited from lower inventory costs. After accepting the buyer’s condition, the vendor compensates the buyer for his increased inventory cost and gives consent for additional savings by offering a quantity discount. The centralized decision making is examined for the effect of this strategy with the presence of backorder for buyer and inspection cost for the vendor. The quantity discount strategy, with the presence of variable backorder and inspections, can allow more savings for all players of supply chain. Some numerical examples, sensitivity analysis, and graphical representations are given to illustrate more savings from existing literature and comparisons between the several demand values.

COORDINATION OF A BUYER-VENDOR SUPPLY CHAIN FOR A PERISHABLE PRODUCT UNDER SYMMETRIC AND ASYMMETRIC INFORMATION

2011 ◽  
Vol 28 (05) ◽  
pp. 673-688 ◽  
Author(s):  
QIN-HONG ZHANG ◽  
JIAN-WEN LUO
Keyword(s):  
Supply Chain ◽  
Asymmetric Information ◽  
Private Information ◽  
Supply Chain Coordination ◽  
Quantity Discount ◽  
Perishable Product ◽  
Symmetric Information ◽  
Holding Cost ◽  
Optimal Quantity ◽  
Dependent Demand

We consider a two-level supply chain for a perishable product with stock dependent demand, and study the supply chain coordination issues with quantity discount contract under both symmetric and asymmetric information. We design an optimal quantity discount contract for the vendor, and show that the quantity discount contract can coordinate the supply chain under symmetric information. However, the vendor is not able to realize supply chain coordination with only quantity discount contract if the buyer's holding cost is private information since the buyer may keep this information private for bargaining a higher price discount. Nevertheless, quantity discount contract is still beneficial to the vendor as compared to the case without quantity discount. Numerical experiments are conducted to demonstrate the theoretical results.

scholarly journals Emergency Quantity Discount Contract with Suppliers Risk Aversion under Stochastic Price

Mathematics ◽  
2021 ◽  
Vol 9 (15) ◽  
pp. 1791
Author(s):  
Shuangsheng Wu ◽  
Qi Li
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Value At Risk ◽  
Risk Measure ◽  
Supply Chain Coordination ◽  
Conditional Value At Risk ◽  
Market Demand ◽  
Step Size ◽  
Quantity Discount ◽  
Related Factors

This paper constructs an emergency quantity discount contract to explore the inherent law of the contract coordinating the supply chain with stochastic market demand and price and the risk-averse supplier. Meanwhile, the conditional value-at-risk (CVaR) risk measure criterion is revised to study the influence of supplier’s risk aversion attitude on supply chain coordination. The results show that supplier risk aversion will cause the bifurcation of the relevant factors in the supply chain under the stochastic price. Within the bifurcation region, the supply chain cannot be coordinated; out of the bifurcation region, the supply chain can achieve coordination. The supply chain related factors’ variation range in the bifurcation region is related to the step size of the risk aversion factor and the normal distribution function’s variance of the market demand, and it increases with the latter.

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