Title

Supply chain channel coordination under sales rebate return policy contract using simulation optimization

Authors

Authors

M. Darayi; H. Eskandari;C. D. Geiger

Comments

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Abbreviated Journal Title

Sci. Iran.

Keywords

Supply chain coordination; Return policy with sales rebate and penalty; contract; Simulation; Price- and effort- dependent demand SRP: Sales; Rebate and Penalty; RSRP: Return policy with Sales Rebate and Penalty; LRSRP: Limited return policy with Sales Rebate and Penalty; REVENUE-SHARING CONTRACT; COMPETITION; MANUFACTURER; SYSTEMS; DEMAND; PRICE; Engineering, Multidisciplinary

Abstract

This paper proposes a Stackelberg game-based approach for channel coordination for a supply chain consisting of one supplier and two competing retailers facing stochastic demand that is sensitive to both sales effort and retail price. In the proposed approach, the supplier, as the leader, defines the contract format and parameters, and the retailers determine the order quantity, retail price and sales effort. The literature primarily focuses on the design of the contract parameters to ensure channel coordination, whereas much less attention is given to the analysis of conditions supporting contract implementation. This study focuses on implementation of the Return policy with a Sales Rebate and Penalty (RSRP) contract as a coordination mechanism. The negotiation and trading procedure among supply chain members is modeled using a simulation optimization-based decision support tool. The possibility that retailers impose their own preferences that disturb channel coordination after signing the RSRP contract is analyzed, and a new Limited Return policy with a Sales Rebate and Penalty (LRSRP) contract, which helps the supplier guarantee channel coordination and control retailer decisions, is proposed. (C) 2014 Sharif University of Technology. All rights reserved.

Journal Title

Scientia Iranica

Volume

21

Issue/Number

6

Publication Date

1-1-2014

Document Type

Article

Language

English

First Page

2295

Last Page

2306

WOS Identifier

WOS:000349514800002

ISSN

1026-3098

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