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Two-echelon supply chain coordination through the unified number of annual orders

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  • Zhou, Yong-Wu

Abstract

This paper studies the problem of how to coordinate a one-supplier, multi-retailer supply chain by requiring retailers to adopt the unified number of annual orders proposed by the supplier. The paper presents two coordination models: one considering a small number of retailers; the other considering a large number of retailers. In the proposed models, the supplier views all retailers or some selected retailers (if more beneficial) in the supply chain as one group, then offers a price discount to entice the retailers in this group placing their orders only with the specific number of annual orders. A heuristic is developed for each model to let the supplier know which retailers will be selected to implement the common number of annual orders, and how to determine the corresponding optimal number of annual replenishments and price discount. By using a numerical study, we evaluate the benefit of the proposed coordination strategy.

Suggested Citation

  • Zhou, Yong-Wu, 2009. "Two-echelon supply chain coordination through the unified number of annual orders," International Journal of Production Economics, Elsevier, vol. 117(1), pages 162-173, January.
    • Handle: RePEc:eee:proeco:v:117:y:2009:i:1:p:162-173
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    References listed on IDEAS

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    Cited by:

    1. Tsao, Yu-Chung, 2010. "Managing multi-echelon multi-item channels with trade allowances under credit period," International Journal of Production Economics, Elsevier, vol. 127(2), pages 226-237, October.

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