Socially concerned periodic review replenishment system with customer service level and supply chain contracting

This study contributes to the periodic review inventory system literature by: (1) investigating customer service level (CSL) as a social responsibility in pharmaceutical supply chains (PSCs) and (2) proposing chain contracting achieve win–win coordination guarantee satisfied CSL. Specifically, considering demand uncertainty one of main challenges faced by pharmacies, we analyze how applying contracts coordinate policy pharmacy with that its supplier can affect their profits CSL offered society. Having shown advantages centralization compared decentralization, design scheme based on quantity discount contract encourage players move towards centralization. Under proposed scheme, first obtain minimum maximum acceptable amounts from each actor’s viewpoint. Then, propose benefit-sharing strategy order make plan interesting both sides. The distribute extra equitably between two participants according bargaining power, which condition for actors. Our results suggest coordinating period order-up-to-level retailer replenishment multiplier will be benefit terms economic profitability responsibility.