Pricing and ordering strategies in a two-echelon supply chain under price discount policy:a Stackelberg game approach

Supply chain management coordinates different strategies for the production system.The manufacturer requires some incentive schemes to motivate the retailer to change his policy,optimal for the whole system.This paper suggests a discount mechanism by which companies can coordinate their ordering and pricing strategies throughout a supply chain model with a single manufacturer and single retailer.Also,the demand curve is iso-elastic price sensitive.Channel members have decided their selling price and order quantity jointly and independently to maximize the supply chain profit.A coordination mechanism is proposed based on quantity discounts to correlate pricing and ordering strategies simultaneously.The decentralized case is analyzed under the manufacturer-Stackelberg game approach.The result of numerical investigation shows that the suggested discount mechanism has improved the supply chain profit as well as each channel member’s profit in comparison with the centralized and decentralized decisions without discount.

Optimal pricing, replenishment scheduling, and preservation technology investment policy for multi-item deteriorating inventory model under shortages

In a wholesale shop,the retailer is required to keep an inventory of various ranges of a product due to uncertainty in consumer preferences and behavior.Different Economic Order Quantity(EOQ)models for each variety of a product are needed for optimum level of inventory.EOQ model decides how much stock a shopkeeper has to store,according to demand and deterioration of different items to optimize the inventory policy of multiple products.Items like fashion,food,vegetables,pharmaceuticals,etc.,deteriorate in the retailer’s warehouse during storage.An investment is required in preservation technology to significantly reduce the deterioration rate,reduce economic losses,and increase business competitiveness.Here,a multi-item deteriorating EOQ model with a fixed cycle duration has been developed incorporating the preservation technology.The demands for the items are a quadratic function of the selling price,and shortages are allowed.The main objective is to determine the optimal selling price,investment under preservation,the time length up to zero inventory,order quantity of the proposed inventory model such that the overall profit will be maximized.First,we prove that the optimal selling price and investment in preservation exist and are unique.Next,the total profit per unit time is a concave function of selling price and preservation technology investment.An algorithm is designed to obtain the optimum joint policy.A numerical example has been given to illustrate the model,and sensitivity analysis is conducted,which gives some managerial insights.