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A production-inventory model for a two-echelon supply chain when demand is dependent on sales teams׳ initiatives

Author

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  • Cárdenas-Barrón, Leopoldo Eduardo
  • Sana, Shib Sankar

Abstract

This paper investigates the issue of channel coordination for a two echelon supply chain consisting of one manufacturer and one retailer. In this supply chain, the demand is sensitive to promotional efforts/sales teams׳ initiatives. A production-inventory model is developed that considers the procurement cost per unit as a function of the production rate. To resolve the issues of channel coordination and promotion-based demand, a variety of centralized coordinating systems are explored. An analytical method is employed to achieve optimal production rate, production lot size, backlogging and the initiatives of sales teams so that the profits of both manufacturer and retailer are maximized. Some numerical examples are solved in order to better understand the proposed production-inventory model. The results of a sensitivity analysis are also provided. Finally, some conclusions and future researches are included.

Suggested Citation

  • Cárdenas-Barrón, Leopoldo Eduardo & Sana, Shib Sankar, 2014. "A production-inventory model for a two-echelon supply chain when demand is dependent on sales teams׳ initiatives," International Journal of Production Economics, Elsevier, vol. 155(C), pages 249-258.
  • Handle: RePEc:eee:proeco:v:155:y:2014:i:c:p:249-258
    DOI: 10.1016/j.ijpe.2014.03.007
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    References listed on IDEAS

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    1. Sana, Shib Sankar, 2013. "Optimal contract strategies for two stage supply chain," Economic Modelling, Elsevier, vol. 30(C), pages 253-260.
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    Cited by:

    1. Manoranjan De & Barun Das & Manoranjan Maiti, 2016. "EPL models for complementary and substitute items under imperfect production process with promotional cost and selling price dependent demands," OPSEARCH, Springer;Operational Research Society of India, vol. 53(2), pages 259-277, June.
    2. repec:wsi:apjorx:v:34:y:2017:i:04:n:s021759591750021x is not listed on IDEAS
    3. repec:taf:oabmxx:v:2:y:2015:i:1:p:1011014 is not listed on IDEAS
    4. repec:spr:opsear:v:54:y:2017:i:2:d:10.1007_s12597-016-0283-4 is not listed on IDEAS
    5. repec:spr:annopr:v:260:y:2018:i:1:d:10.1007_s10479-015-1996-0 is not listed on IDEAS
    6. M. Palanivel & R. Uthayakumar, 2017. "A production-inventory model with promotional effort, variable production cost and probabilistic deterioration," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(1), pages 290-300, January.
    7. Chen, Tsung-Hui, 2017. "Optimizing pricing, replenishment and rework decision for imperfect and deteriorating items in a manufacturer-retailer channel," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 539-550.
    8. Sarkar, Biswajit & Ganguly, Baishakhi & Sarkar, Mitali & Pareek, Sarla, 2016. "Effect of variable transportation and carbon emission in a three-echelon supply chain model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 112-128.
    9. repec:spr:annopr:v:248:y:2017:i:1:d:10.1007_s10479-016-2216-2 is not listed on IDEAS

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