Optimizing pricing and ordering strategies in a three-level supply chain under return policy

محورهای موضوعی : Mathematical Optimization

Mahsa Noori-daryan ¹ ( School of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran )
Ata Allah Taleizadeh ² ( School of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran )

تاریخ دریافت : 1399/07/17 تاریخ پذیرش : 1399/07/17 تاریخ انتشار : 1398/12/11

کلید واژه: Pricing . Ordering . Production . Return policy . Shortage . Nash, equilibrium game . Supply chain,

چکیده مقاله :

This paper develops an economic production quantity model in a three-echelon supply chain composing of a supplier, a manufacturer and a wholesaler under two scenarios. As the first scenario, we consider a return contract between the outside supplier and the supplier and also between the manufacturer and the wholesaler, but in the second one, the return policy between the manufacturer and the wholesaler is not applied. Here, it is assumed that shortage is permitted and demand is price-sensitive. The principal goal of the research is to maximize the total profit of the chain by optimizing the order quantity of the supplier and the selling prices of the manufacturer and the wholesaler. Nash-equilibrium approach is considered between the chain members. In the end, a numerical example is presented to clarify the applicability of the introduced model and compare the profit of the chain under two scenarios.

منابع و مأخذ:

Abad PL (2003) Optimal pricing and lot-sizing under conditions of perishability, finite production and partial backordering and lost sale. Eur J Oper Res 144(3):677–685
Arcelus FJ, Kumar S, Srinivasan G (2005) Retailer’s response to alternate manufacturer’s incentives under a single-period, pricedependent, stochastic-demand framework. Decis Sci 36(4):599–625
Chao X, Chen H, Zheng S (2008) Joint replenishment and pricing decisions in inventory systems with stochastically dependent supply capacity. Eur J Oper Res 191(1):140–153
Chen J, Bell PC (2011) Coordinating a decentralized supply chain with customer returns and price-dependent stochastic demand using a buyback policy. Eur J Oper Res 212(2):293–300
Esmaeilzadeh A, Taleizadeh AA (2016) Pricing in a two-echelon supply chain with different market powers: game theory
approaches. J Ind Eng Int 12:119–135
Gurnani H, Sharma A, Grewal D (2010) Optimal returns policy under demand uncertainty. J Retail 86(2):137–147
Hsu JT, Hsu LF (2012) A note on ‘‘optimal inventory model for items with imperfect quality and shortage backordering’’. Int J Ind Eng Comput 3(5):939–948
Hu J, Xu Y (2012) Distribution free approach for coordination of a supply chain with consumer return. Phys Proc 24(Part
B):1500–1506
Hu W, Li Y, Govindan K (2014) The impact of consumer returns policies on consignment contracts with inventory control.
Eur J Oper Res 233(2):398–407
Liu ST (2006) Computational method for the profit bounds of inventory model with interval demand and unit cost. Appl Math Comput 183(1):499–507
Maleki Vishkaei B, Niaki STA, Farhangi M, Ebrahimnezhad Moghadam Rashti M (2014) Optimal lot sizing in screening
processes with returnable defective items. J Ind Eng Int 10:70. https://doi.org/10.1007/s40092-014-0070-x
Noori-daryan M, Taleizadeh AA, Banakar H (2014) Pricing and lotsizing policies in multi-level supply chain with rework process. In: 10th international industrial engineering conference, Tehran
Sadjadi SJ, Hamidi Hesarsorkh A, Mohammadi M, Bonyadi Naeini A (2015) Joint pricing and production management: a geometric programming approach with consideration of cubic production
cost function. J Ind Eng Int 11(2):209–223
Sajadieh MS, Akbari Jokar MR (2009) Optimizing shipment, ordering and pricing policies in a two-stage supply chain with pricesensitive demand. Transp Res Part E 45:564–571
Sana SS (2013) Optimal contract strategies for two stage supply chain. Econ Model 30:253–260
Shao H, Li Y, Zhao D (2011) An optimal decisional model in twoechelon supply chain. Proc Eng 15:4282–4286
Sundara Rajan R, Uthayakumar R (2017) Optimal pricing and replenishment policies for instantaneous deteriorating items with backlogging and trade credit under inflation. J Ind Eng Int. https://doi.org/10.1007/s40092-017-0200-3 (in press)
Taleizadeh AA (2014) An economic order quantity model with partial backordering and advance payments for an evaporating item. Int J Prod Econ 155:185–193
Taleizadeh AA, Charmchi M (2015) Optimal advertising and pricing decisions for complementary products. J Ind Eng Int
11(1):111–117
Taleizadeh AA, Noori-daryan M (2015) Pricing, manufacturing and inventory policies for raw material in a three-level supply chain. Int J Syst Sci 47(4):919–931
Taleizadeh AA, Pentico DW (2013) An economic order quantity model with known price increase and partial backordering. Eur J Oper Res 28(3):516–525
Taleizadeh AA, Niaki ST, Aryanezhad MB (2008a) Multi-product multi-constraint inventory control systems with stochastic
replenishment and discount under fuzzy purchasing price and holding costs. Am J Appl Sci 8(7):1228–1234
Taleizadeh AA, Aryanezhad MB, Niaki STA (2008b) Optimizing multi-products multi-constraints inventory control systems with stochastic replenishments. J Appl Sci 6(1):1
Taleizadeh AA, Moghadasi H, Niaki STA, Eftekhari AK (2009) An EOQ-joint replenishment policy to supply expensive imported raw materials with payment in advance. J Appl Sci 8(23):4263–4273
Taleizadeh AA, Niaki STA, Aryanezhad MB (2010a) Replenish-up-to multi chance-constraint inventory control system with stochastic period lengths and total discount under fuzzy purchasing price and holding costs. Int J Syst Sci 41(10):1187–1200

Taleizadeh AA, Niaki STA, Aryanezhad MB, Fallah-Tafti A (2010b) A genetic algorithm to optimize multi-product multi-constraint inventory control systems with stochastic replenishments and discount. Int J Adv Manuf Technol 51(1–4):311–323
Taleizadeh AA, Barzinpour F, Wee HM (2011) Meta-heuristic algorithms to solve the fuzzy single period problem. Math
Comput Model 54(5–6):1273–1285
Taleizadeh AA, Pentico DW, Jabalameli MS, Aryanezhad MB (2013) An economic order quantity model with multiple partial prepayments and partial backordering. Math Comput Model 57(3–4):311–323
Thangam A (2012) Optimal price discounting and lot-sizing policies for perishable items in a supply chain under advance payment scheme and two-echelon trade credits. Int J Prod Econ 139:459–472
Vijayashree M, Uthayakumar R (2017) A single-vendor and a singlebuyer integrated inventory model with ordering cost reduction dependent on lead time. J Ind Eng Int. https://doi.org/10.1007/
s40092-017-0193-y (in press)

Xiao T, Jin J, Chen G, Shi J, Xie M (2010) Ordering, wholesale pricing and lead-time decisions in a three-stage supply chain
under demand uncertainty. Comput Ind Eng 59:840–852
Zhang M, Bell PC (2007) The effect of market segmentation with demand leakage between market segments on a firm’s price and inventory decisions. Eur J Oper Res 182(2):738–754
Zhu SX (2012) Joint pricing and inventory replenishment decisions with returns and expediting. Eur J Oper Res 216(1):105–112