Coordinating Ordering and Pricing Decisions in a Two-stage Distribution System
We consider a particular model of short-term discounting that the distributor offers a discounted price for the retailers orders placed at the beginning of its replenishment cycle, in a non-cooperative distribution system with one distributor and multiple retailers, each facing price-sensitive demand. We examine the value of the price discount strategy as a mechanism for the distributor to coordinate the retailers ordering and pricing decisions. Our analysis reveals that, in the presence of homogeneous retailers, the distributors profit percentage increase due to coordination generally is decreasing in the number of retailers and in the inventory holding cost rate. Although an increase of the inventory holding cost rate has a negative effect on the distributors profit, it may have a positive effect on the retailers profits. We further find in the presence of heterogeneous retailers that offering a discounted price benefits the distributor when both the inventory holding cost rate and the variation of demand are small or large.
Coordination price discount supply chain short-term discounting
Yu-Te Liu Wei-Ming Wang Chung-Chi Hsieh
Department of Industrial and Information Management,National Cheng Kung University,Tainan 701,Taiwan
国际会议
2009 6th International Conference on Service Systems and Service Management( 2009 第六届服务系统与服务管理国际会议)
厦门
英文
438-443
2009-06-08（万方平台首次上网日期，不代表论文的发表时间）