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Integrated production, inventory and pricing decisions in two-echelon supply chains
Dissertation   Open access

Integrated production, inventory and pricing decisions in two-echelon supply chains

Changyuan Yan
Doctor of Philosophy (Ph.D.), Drexel University
Jun 2012
DOI:
https://doi.org/10.17918/etd-7569
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Abstract

Industrial management Business logistics
This thesis investigates the optimal decisions for maximizing the expected profit level of a supply chain when market demand is price-sensitive. We examine two-echelon supply chains consisting of a single manufacturer and one or more retailers, where the organizations simultaneously determine the retail price, production lot size and inventory replenishment schedules to maximize the profit of the entire supply chain. In particular, we first develop a model for singlemanufacturer single-retailer (SMSR) supply chains, assuming deterministic market demand. We then extend the SMSR model to supply chains with multiple-retailers (i.e. SMMR supply chains). Finally, we examine both SMSR and SMMR supply chains in stochastic market demand environments. We show that supply chain cooperation/centralization brings higher profits for the manufacturer and the retailer(s), and benefits retail consumers with a lower retail price. We propose efficient algorithms for our models and illustrate them through numerical examples. Managerial implications and future research directions are also discussed.

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