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1 – 10 of over 1000The purpose of this paper is to investigate the manufacturer’s production, pricing and green technology investment decision problem when strategic customer behavior and carbon…
Abstract
Purpose
The purpose of this paper is to investigate the manufacturer’s production, pricing and green technology investment decision problem when strategic customer behavior and carbon emissions-sensitive random demand is taken into consideration and discuss the impact of carbon emissions-sensitive demand on the manufacturer’s operation strategies, total carbon emissions and maximum expected profit.
Design/methodology/approach
The authors formulate a model to introduce carbon emissions-sensitive demand into the newsvendor framework with strategic customer behavior. The authors characterize the rational expectations equilibrium to derive the optimal solutions to the manufacturer. The authors analyze the effects of carbon emissions-sensitive demand on the manufacturer’s optimal strategies, total carbon emissions and maximum expected profit by comparative analysis.
Findings
The authors obtain the manufacturer’s optimal production, pricing and green technology investment strategies under rational expectations equilibrium in scenario of price-sensitive demand and that of carbon emissions-sensitive demand, respectively. The authors find that as customer demand changes from price-sensitive demand to carbon emissions-sensitive demand, the manufacturer’s optimal prices are the same but optimal production quantity, optimal unit carbon emissions and maximum expected profit go down. Though the total emissions decrease, the carbon emissions reduction would not increase as the demand is more carbon emissions-sensitive. Whether it increases or decreases depends on the model parameters.
Originality/value
Carbon emissions-sensitive demand and strategic customer behavior are considered simultaneously in an integrated model. The result can guide the manufacturer decision-making. The proposed model are hoped to shed light to the future works in the field of sustainable supply chain management.
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Monami Das Roy and Shib Sankar Sana
This research work introduces an imperfect production system where the demand is assumed to be stochastic and it is influenced by random selling price. The shift time from an…
Abstract
Purpose
This research work introduces an imperfect production system where the demand is assumed to be stochastic and it is influenced by random selling price. The shift time from an “in-control” state to an “out-of-control” state is exponentially distributed. The accumulated inventory contains both perfect and defective items which are all sold with a free repair warranty (FRW) offer. Complete back ordering of shortages are taken into account. The purpose of this paper is to determine the optimal selling price and hence the optimal production lot size such that the expected profit is maximized.
Design/methodology/approach
The general model is discussed separately for both types of uniformly distributed selling price-sensitive demand pattern: additive type and multiplicative type. Numerical examples and graphical representations of the optimal solutions are provided to illustrate the models.
Findings
This paper helps the manager to manage future situations and it may be considered as a base work for the researchers to work in this direction.
Research limitations/implications
The main limitation of this model is to consider a single item for a single channel system. There are many correlated issues that need to be further investigated. The future study in this direction may include the consideration of multi-items, diverse demand pattern with different types of price distributions.
Originality/value
In the production inventory literature, plenty of articles are available considering imperfect production but none of them have considered selling price-sensitive stochastic demand where the sales price is random in character under an FRW offer.
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Ayad Hendalianpour, Mohammad Hamzehlou, Mohammad Reza Feylizadeh, Naiming Xie and Mohammad Hossein Shakerizadeh
This study examines the potential of contracts as one of the supply chain coordination mechanisms under competitive conditions. It also investigates a two-echelon supply chain…
Abstract
Purpose
This study examines the potential of contracts as one of the supply chain coordination mechanisms under competitive conditions. It also investigates a two-echelon supply chain model with two manufacturers and two retailers to develop a competitive structure in grey stochastic demand.
Design/methodology/approach
Supply chain demand is considered as a stochastic phenomenon depending on the selling price of the product. Also, products can be replaced by market manufacturers. Each retailer faces the pricing of products from two manufacturers, leading to competition between downstream retailers. In the present study, the duopoly supply chain model was presented based on the wholesale price contract, revenue-sharing contract and quantity discount contract separately.
Findings
Grey optimization and analysis of their coordination were presented. The results showed the high performance of revenue-sharing contracts in the supply chain. Thus, manufacturers will give the next priority to quantity discount contracts.
Originality/value
Ordering is the main factor contributing to competitive decision-making. Meanwhile, decision-making along with ordering and pricing will be required due to the nature of the demand.
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Nita H. Shah, Ajay S. Gor and Chetan A. Jhaveri
The purpose of this paper is to study integrated inventory system and pricing and ordering strategy for vendor‐buyer supply chain system. Here, the vendor offers a trade credit to…
Abstract
Purpose
The purpose of this paper is to study integrated inventory system and pricing and ordering strategy for vendor‐buyer supply chain system. Here, the vendor offers a trade credit to the buyer when the buyer's order quantity exceeds a given pre‐specified quantity. Therefore, to incorporate the concept of vendor‐buyer integration and trade credit linked, the authors analyze the model to determine the optimal strategy for an integrated vendor‐buyer inventory system under the condition of credit linked to the order quantity when demand is quadratic.
Design/methodology/approach
A mathematical model for integrated inventory system is developed when demand rate is increasing function of the time and decreasing function of the retail price. By analyzing the total channel profit function, the authors developed some useful results to characterize the optimal solution and provide an iterative algorithm to find the retail price, buyer's order quantity and the number of shipments per production run from the vendor to the buyer.
Findings
By developing a solution algorithm, the optimal retail price, order quantity and number of shipments from the vendor to the buyer are provided. Numerical examples and sensitivity analyses are presented to validate the proposed model. Through extensive numerical analyses, it is observed that a longer credit term increases profits of the player for the entire supply chain. The vendor should establish the threshold for allowing trade credit comprehensively to ensure the greatest benefit for both players.
Originality/value
Most of the research articles available in the literature considered the constant demand or linearly changing demand. In this paper, a mathematical model is developed considering time dependent quadratic demand. Very few researchers have investigated joint optimal policy in vendor‐buyer supply chain system, considering trade credit is linked to order quantity, and still there are not many findings on the benefit of integrated policy and trade credit.
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How should your company respond to the complex competitive challenge of declining demand? The model described here can increase your prospects of success.
Ata Allah Taleizadeh, Mahsa Noori-Daryan and Shib Sankar Sana
This paper aims to deal with optimal pricing and production tactics for a bi-echelon green supply chain, including a producer and a vendor in presence of three various scenarios…
Abstract
Purpose
This paper aims to deal with optimal pricing and production tactics for a bi-echelon green supply chain, including a producer and a vendor in presence of three various scenarios. Demand depends on a price, refund and quality where the producer controls quality and the vendor proposes a refund policy to purchasers to encourage them to order more.
Design/methodology/approach
In the first scenario, the members seek to optimize their optimum decision variables under a centralized decision-making method while in the second scenario, a decentralized system is assumed where the members make a decision about variables and profits under a non-cooperative game. In the third scenario, a cost-sharing agreement is concluded between the members to provide a high-quality item to the purchasers.
Findings
The performance of the proposed model is investigated by illustrating a numerical example. A sensitivity analysis of some key parameters has been done to study the effect of the changes on the optimal values of the decision variables and profits. From sensitivity analysis, the real features are observed and mentioned in this section.
Originality/value
This research examines the behavior of partners in a green supply chain facing with a group of purchasers whose demand is the function of a price, greenery degree and refund rate. This proposed mathematical model is developed and analyzed which has an implication in supply chain model.
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A supply chain is two or more parties linked by a flow of goods, information, and funds. When one or more parties of the supply chain try to optimize their own profits, system…
Abstract
A supply chain is two or more parties linked by a flow of goods, information, and funds. When one or more parties of the supply chain try to optimize their own profits, system performance may be hurt. Supply chain contract is a coordination mechanism that provides incentives to all of its members so that the decentralized supply chain behaves nearly or exactly the same as the integrated one. We have seen a vast literature on supply chain contracts recently. However, little work has been done on the relationships of those supply chain contract models. In this paper, we provide a general framework that synthesizes existing results for a variety of supply chain contract forms.
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Syed Asif Raza and Mohd. Nishat Faisal
This paper aims to develop efficient decision support tools for a firm’s environment protection by using greening effort while yet improving profitability by utilizing pricing and…
Abstract
Purpose
This paper aims to develop efficient decision support tools for a firm’s environment protection by using greening effort while yet improving profitability by utilizing pricing and inventory decisions with discount consideration.
Design/methodology/approach
This study proposed a mathematical model for price- and greening effort-dependent demand rate with discount considerations. Later, the mathematical model is extended to the situation in which the demand rate is also dependent on the stock level, in addition to the price and greening effort. Efficient solution methodologies are developed for finding the optimal solution to the proposed models.
Findings
Simple yet elegant models are proposed to mimic real-life applications. Structural properties of the models are explored to outline efficient algorithms with quantity discounts.
Research limitations/implications
The paper considers monopoly and assumes deterministic demand. Only a more commonly observed all-units discount scheme is studied.
Practical implications
The models provide decision support tools for firms in pursuit of joint profit maximization and environment consciousness goals.
Social implications
The study develops environment-friendly approaches for inventory management and improving the profitability alike.
Originality/value
This study is among the first to consider environmental protection with an investment in greening effort along with inventory management and pricing decision. The study also explored the effect of all-unit quantity discounts.
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Adelina Gnanlet and Hyun-cheol Paul Choi
Hospitals procure high volumes of medical supplies through large distributors in order to leverage economies of scale. However, when shortages hit, hospitals incur high penalty…
Abstract
Purpose
Hospitals procure high volumes of medical supplies through large distributors in order to leverage economies of scale. However, when shortages hit, hospitals incur high penalty costs by purchasing from secondary markets. In this paper, the authors counter the hospital's typical purchasing strategy that a collaborative relationship with a large, Tier I medical supply distributor is beneficial under all conditions. The paper finds that during shortages the more beneficial strategy is for the hospital to add a medium-sized, Tier II distributor who offers a transactional relationship and is willing to provide a “preferred allocation” in return for a pre-committed annual purchase contract. The paper aims to discuss these issues.
Design/methodology/approach
The authors assume availability of order volume to be a stochastic process and formulate the problem as a two-stage stochastic programming model, with optimal allocation in the second stage. The authors analyze the first-stage objective function using full-factorial numerical experimentation and perform a complete search for optimal volume mix. In addition, the model accounts for purchasing relationship, shortage cost, and varying price discount schedules.
Findings
Under no shortage situation, hospitals purchase its entire order volume from Tier I distributor. However, during shortages, for any increase in preferred allocation from the Tier II distributor, hospitals purchase high volumes from the Tier II distributor except when preferred allocation and availability is high. The paper finds that the average cost savings for the use of preferred allocation is 16.14 percent.
Originality/value
Existing purchasing literature focusses on the benefit of using single/multiple homogenous distributors under all conditions. In this paper, the authors examine the benefit of using non-homogenous distributors under conditions of shortage when one of them is willing to provide preferred allocation under varying price discount schedules.
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Amin Zaheri, Majid Rafiee and Vahid Kayvanfar
This paper aims to study the impact of existence and lack of discount on the relationships between one manufacturer and one retailer under the cooperative and the non-cooperative…
Abstract
Purpose
This paper aims to study the impact of existence and lack of discount on the relationships between one manufacturer and one retailer under the cooperative and the non-cooperative games and the members’ profits are compared.
Design/methodology/approach
In the first approach, the manufacturer’s price function is constant, and in the second approach, this price function is a decreasing function with respect to lot size. These approaches are modeled through three games structure, including two Stackelberg games and one cooperative game.
Findings
Some numerical instances comprising sensitivity analysis are provided, and then the members’ profits in different scenarios are compared. This paper reveals that in the presented models, whether the members are inclined to change their profits.
Practical implications
This paper presents a tool of decision-making for the type of relationships of members in two different circumstances, and an approach is also presented to maximize the members’ profit.
Originality/value
In this paper, the relationships between one manufacturer and one retailer are studied under six different circumstances, where pricing, cooperative advertising and inventory cost are considered simultaneously. Also, a different model is presented to make a balance in individual profits and gain more profit for each member compared to the cooperative and non-cooperative game.
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