Coordinated Ordering and Pricing Decisions for a Short-life-cycle Product in a Three-stage Supply Chain with Capacity Constraint
نویسندگان
چکیده
This paper studies supply chain coordination in a decentralized supply chain which consists of a distributor, a manufacturer, and an OEM. The distributor meets price-sensitive random demand of a product with a short life cycle. The manufacturer, having limited capacity, receives the order from the distributor; when the distributor's order exceeds the manufacturer's capacity, the manufacturer outsources insufficient portion of production to the OEM. We develop a mechanism to coordinate the supply chain members' decisions in order to improve the total supply chain profit. We consider two coordination scenarios: one is that the OEM does not participate in the coordination, the other is that the OEM participates in the coordination. Each member's optimal decisions in the absence and presence of coordination will be derived. Then, we provide a numerical study to analyze the performance of coordination, and explore the managerial insights for the members in the supply chain.
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