Optimal Supply Chain Strategy for Varying Production Cost
نویسنده
چکیده
Changes in production cost always lead to changes in wholesale and retail price. How to adjust the wholesale price, retail price and order quantity in order to derive an optimal strategy for the supplier and the retailer is one of the most perplexing problems. The purpose of this study is to develop a strategy to maximize the expected profit by simultaneously determining the adjustment ratio of wholesale/retail price and the order quantity under customer’s uncertain and price-sensitive demand. A coordinated policy is proposed. Numerical examples and sensitivity analysis are provided to illustrate the theory. Keywords Production cost change, coordination, newsboy problem, compensation mechanism. ___________________________________________________________________________________
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