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Centralized Decisions for a Two-Stage Supply Chain with Price-Discount Dependent Demand

Author

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  • Hou Xiyang

    (Automatic School, Beijing University of Posts and Telecommunications, Beijing100876, China)

  • Guo Yongjiang

    (School of Science, Beijing University of Posts and Telecommunications, Beijing100876, China)

Abstract

In this paper, we study a centralized supply chain for a two-stage with selling price discount. This supply chain consists of a supplier and a retailer. Based on the feature that the product’s selling season is short and the supply chain faces great demand uncertainty. We consider a two-stage scenario where, at the beginning of stage 1, the supplier reserves production capacity based on historic data in advance, stage 2 comes to us after some leadtime, both the supplier and the retailer update the demand information, the retailer then places an order not exceeding the reserved capacity based on the selling-pricing discount dependent demand. We make optimal decisions on the reserved capacity in stage 1, selling price discount and order quantity in stage 2. In this supply chain, the pattern in stage 2 is figured out first, and then stage 1 is cleared as well. Then we present a numerical example to give some insights. Finally we get some conclusions.

Suggested Citation

  • Hou Xiyang & Guo Yongjiang, 2018. "Centralized Decisions for a Two-Stage Supply Chain with Price-Discount Dependent Demand," Journal of Systems Science and Information, De Gruyter, vol. 6(3), pages 249-259, June.
    • Handle: RePEc:bpj:jossai:v:6:y:2018:i:3:p:249-259:n:4
    DOI: 10.21078/JSSI-2018-249-11
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    References listed on IDEAS

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    1. Chen, Haoya & Chen, Youhua (Frank) & Chiu, Chun-Hung & Choi, Tsan-Ming & Sethi, Suresh, 2010. "Coordination mechanism for the supply chain with leadtime consideration and price-dependent demand," European Journal of Operational Research, Elsevier, vol. 203(1), pages 70-80, May.
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