Optimal (R, Q) policy and pricing for two-echelon supply chain with lead time and retailer's service-level incomplete information

Many studies focus on inventory systems to analyze different real-world situations. This paper considers a two-echelon supply chain that includes one warehouse and one retailer with stochastic demand and an up-to-level policy. The retailer's lead time includes the transportation time from the w...

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Published in:Journal of industrial engineering international Vol. 14; no. 1; pp. 43 - 53
Main Authors: Esmaeili, M, Naghavi, M. S, Ghahghaei, A
Format: Journal Article
Language:English
Published: Heidelberg Springer 01-03-2018
Springer Berlin Heidelberg
Islamic Azad University, South Tehran Branch
Islamic Azad University
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Abstract Many studies focus on inventory systems to analyze different real-world situations. This paper considers a two-echelon supply chain that includes one warehouse and one retailer with stochastic demand and an up-to-level policy. The retailer's lead time includes the transportation time from the warehouse to the retailer that is unknown to the retailer. On the other hand, the warehouse is unaware of retailer's service level. The relationship between the retailer and the warehouse is modeled based on the Stackelberg game with incomplete information. Moreover, their relationship is presented when the warehouse and the retailer reveal their private information using the incentive strategies. The optimal inventory and pricing policies are obtained using an algorithm based on bi-level programming. Numerical examples, including sensitivity analysis of some key parameters, will compare the results between the Stackelberg models. The results show that information sharing is more beneficial to the warehouse rather than the retailer.
AbstractList Abstract Many studies focus on inventory systems to analyze different real-world situations. This paper considers a two-echelon supply chain that includes one warehouse and one retailer with stochastic demand and an up-to-level policy. The retailer’s lead time includes the transportation time from the warehouse to the retailer that is unknown to the retailer. On the other hand, the warehouse is unaware of retailer’s service level. The relationship between the retailer and the warehouse is modeled based on the Stackelberg game with incomplete information. Moreover, their relationship is presented when the warehouse and the retailer reveal their private information using the incentive strategies. The optimal inventory and pricing policies are obtained using an algorithm based on bi-level programming. Numerical examples, including sensitivity analysis of some key parameters, will compare the results between the Stackelberg models. The results show that information sharing is more beneficial to the warehouse rather than the retailer.
Many studies focus on inventory systems to analyze different real-world situations. This paper considers a two-echelon supply chain that includes one warehouse and one retailer with stochastic demand and an up-to-level policy. The retailer's lead time includes the transportation time from the warehouse to the retailer that is unknown to the retailer. On the other hand, the warehouse is unaware of retailer's service level. The relationship between the retailer and the warehouse is modeled based on the Stackelberg game with incomplete information. Moreover, their relationship is presented when the warehouse and the retailer reveal their private information using the incentive strategies. The optimal inventory and pricing policies are obtained using an algorithm based on bi-level programming. Numerical examples, including sensitivity analysis of some key parameters, will compare the results between the Stackelberg models. The results show that information sharing is more beneficial to the warehouse rather than the retailer.
Author Naghavi, M. S
Ghahghaei, A
Esmaeili, M
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Keywords Lead time
Service level
Transportation cost
Two-echelon supply chain
Incomplete information
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Snippet Many studies focus on inventory systems to analyze different real-world situations. This paper considers a two-echelon supply chain that includes one warehouse...
Abstract Many studies focus on inventory systems to analyze different real-world situations. This paper considers a two-echelon supply chain that includes one...
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proquest
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StartPage 43
SubjectTerms Economic models
Engineering
Engineering Economics
Facility Management
Game theory
Incomplete information
Industrial and Production Engineering
Inventory
Lead time
Logistics
Marketing
Mathematical and Computational Engineering
Organization
Original Research
Parameter sensitivity
Pricing
Quality Control
Reliability
Safety and Risk
Sensitivity analysis
Service level
Supply chains
Transportation cost
Two-echelon supply chain
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Title Optimal (R, Q) policy and pricing for two-echelon supply chain with lead time and retailer's service-level incomplete information
URI https://www.econstor.eu/handle/10419/195590
https://link.springer.com/article/10.1007/s40092-017-0207-9
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