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Integrated decision making model for pricing and locating the customer order decoupling point of a newsvendor supply chain

Author

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  • Iman Ghalehkhondabi

    (Ohio University)

  • Ehsan Ardjmand

    (College of Business Frostburg State University)

  • Gary Weckman

    (Ohio University)

Abstract

A multi-product two echelon supply chain within a newsvendor framework is studied, in which semi-finished products are produced by a supplier and customized according to specific customer orders. The focus of this paper is to investigate a situation where the manufacturer wishes to determine the fraction of production performed by the supplier, its optimal semi-finished product order size, and price for each product type. In order to make the problem more practical, capacity and budget constraints are considered. The computability of the presented model is explored by a numerical example with Poisson arrival demands.

Suggested Citation

  • Iman Ghalehkhondabi & Ehsan Ardjmand & Gary Weckman, 2017. "Integrated decision making model for pricing and locating the customer order decoupling point of a newsvendor supply chain," OPSEARCH, Springer;Operational Research Society of India, vol. 54(2), pages 417-439, June.
    • Handle: RePEc:spr:opsear:v:54:y:2017:i:2:d:10.1007_s12597-016-0286-1
    DOI: 10.1007/s12597-016-0286-1
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    References listed on IDEAS

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