Two-level promotion and ordering policy in a supply chain

This research develops two models to consider retailer sales promotion and manufacturer trade under demand uncertainty. The objective of the first model is determine retailer’s optimal promotional effort order quantity while maximizing profit exogenous promotion. second extends manufacturer’s endogenous decisions. For these models, three different policies (off-invoice, scan-back, unsold-discount) have been compared identify policy that can increase profits. with promotion, level, quantity, are highest off-invoice policy. With respect decisions, profit, higher than scan-backs When comparing policies, we also find wholesale price a key factor influences profit. Our sheds light on importance in supply chain management.