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Research on Decentralized Supply Chain with Channel-Wide Profit Maximization

Received: 12 June 2017     Published: 14 June 2017
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Abstract

This study explores the problem of optimally dynamic joint decisions: replenishment quantity, retail price and depletion time, in a vertically decentralized single-retailer and single-supplier supply chain over a dynamic multi-period planning horizon, subject to multivariate demand function and deteriorating goods with shortages allowed and with no consideration of fixed costs. This research uses a calculus-based formulation coupled with dynamic programming techniques to solve the channel-wide profit maximization under price-only contract and consignment contract respectively. The analysis reveals that the consignment contract can significantly achieve higher channel-wide profit than the price-only contract for the dynamic decentralized channel.

Published in Science Journal of Business and Management (Volume 5, Issue 4)
DOI 10.11648/j.sjbm.20170504.11
Page(s) 132-135
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Decentralized Supply Chain, Dynamic Pricing, Shortages, Fixed Costs

References
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[6] Chena X, Wangb X, Chan HK. Channel coordination through subsidy contract design in the mobile phone industry. International Journal of Production Economics 2016; 171: 97-104.
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[8] Ha AY, Tong S. Revenue sharing contracts in a supply chain with uncontractible actions. Naval Research Logistics 2008; 55(5): 419-431.
[9] Ru J, Wang Y. Consignment contracting: who should control inventory in the supply chain. European Journal of Operational Research 2010; 201(3):760-769.
[10] Chen LT. Dynamic supply chain coordination under consignment and vendor-managed inventory in retailer-centric B2B electronic markets. Industrial Marketing Management 2013; 42(4):518-531.
[11] Chen LT. Buyer-supplier relationship and optimisation model in a dynamic collaborative network with shortages allowed. International Journal of Computer Integrated Manufacturing 2017; 30(7):755-767.
[12] Simchi-Levi D, Kaminsky P, Simchi-Levi E. Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. McGraw-Hill: Taiwan, 2008.
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[17] Varella RR, J Frazão, Oliveira AVM. Dynamic pricing and market segmentation responses to low-cost carrier entry. Transportation Research Part E: Logistics and Transportation Review 2017; 98: 151-170.
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Cite This Article
  • APA Style

    Liang-Tu Chen, Shih-Wen Chien, Chun-Chin Wei. (2017). Research on Decentralized Supply Chain with Channel-Wide Profit Maximization. Science Journal of Business and Management, 5(4), 132-135. https://doi.org/10.11648/j.sjbm.20170504.11

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    ACS Style

    Liang-Tu Chen; Shih-Wen Chien; Chun-Chin Wei. Research on Decentralized Supply Chain with Channel-Wide Profit Maximization. Sci. J. Bus. Manag. 2017, 5(4), 132-135. doi: 10.11648/j.sjbm.20170504.11

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    AMA Style

    Liang-Tu Chen, Shih-Wen Chien, Chun-Chin Wei. Research on Decentralized Supply Chain with Channel-Wide Profit Maximization. Sci J Bus Manag. 2017;5(4):132-135. doi: 10.11648/j.sjbm.20170504.11

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  • @article{10.11648/j.sjbm.20170504.11,
      author = {Liang-Tu Chen and Shih-Wen Chien and Chun-Chin Wei},
      title = {Research on Decentralized Supply Chain with Channel-Wide Profit Maximization},
      journal = {Science Journal of Business and Management},
      volume = {5},
      number = {4},
      pages = {132-135},
      doi = {10.11648/j.sjbm.20170504.11},
      url = {https://doi.org/10.11648/j.sjbm.20170504.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20170504.11},
      abstract = {This study explores the problem of optimally dynamic joint decisions: replenishment quantity, retail price and depletion time, in a vertically decentralized single-retailer and single-supplier supply chain over a dynamic multi-period planning horizon, subject to multivariate demand function and deteriorating goods with shortages allowed and with no consideration of fixed costs. This research uses a calculus-based formulation coupled with dynamic programming techniques to solve the channel-wide profit maximization under price-only contract and consignment contract respectively. The analysis reveals that the consignment contract can significantly achieve higher channel-wide profit than the price-only contract for the dynamic decentralized channel.},
     year = {2017}
    }
    

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    T1  - Research on Decentralized Supply Chain with Channel-Wide Profit Maximization
    AU  - Liang-Tu Chen
    AU  - Shih-Wen Chien
    AU  - Chun-Chin Wei
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    T2  - Science Journal of Business and Management
    JF  - Science Journal of Business and Management
    JO  - Science Journal of Business and Management
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    PB  - Science Publishing Group
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    AB  - This study explores the problem of optimally dynamic joint decisions: replenishment quantity, retail price and depletion time, in a vertically decentralized single-retailer and single-supplier supply chain over a dynamic multi-period planning horizon, subject to multivariate demand function and deteriorating goods with shortages allowed and with no consideration of fixed costs. This research uses a calculus-based formulation coupled with dynamic programming techniques to solve the channel-wide profit maximization under price-only contract and consignment contract respectively. The analysis reveals that the consignment contract can significantly achieve higher channel-wide profit than the price-only contract for the dynamic decentralized channel.
    VL  - 5
    IS  - 4
    ER  - 

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Author Information
  • Department of Commerce Automation and Management, National Pingtung University, Pingtung, Taiwan ROC

  • Department of Information Management, National Kaohsiung University of Applied Sciences, Kaohsiung, Taiwan ROC

  • Department of Marketing and Distribution Management, Chien-Hsin University, Chungli, Taiwan ROC

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