Coordination in Two Level Supply Chain with Price Dependent Demand

In the present day scenario of industrial competition, supply chain management seeks to synchronize a firm’s processes and those of its suppliers to match the flow of materials, services and information with customer demand. It involves the coordination of key processes in the firm such as order placement, order fulfillment and purchasing which are supported by marketing, finance, engineering, information systems, operations and logistics. In this work an attempt has been made to coordinate the members of the supply chain in order to optimize the cost at each level and total relevant cost of the supply chain. A two level supply chain network with single manufacturer supplying a single product to a single retailer is considered in this research. This work focuses on modeling and optimization of two level supply chain with price dependent demand for optimal replenishment quantity, inventory ratio and annual total relevant cost with and without coordination. Also, the numerical illustration is carried to observe the behavioral pattern of the decision variables with positive integer. In addition, the parametric analysis is carried out to observe the variation in optimal values of the decision variables with respect to variation in manufacturers and retailers ordering costs and selling prices. \