Title

Supply Chain Channel Coordination Under Sales Rebate Return Policy Contract Using Simulation Optimization

Keywords

LRSRP: Limited return policy with Sales Rebate and Penalty; Price- and effortdependent demand. SRP: Sales Rebate and Penalty; Return policy with sales rebate and penalty contract; RSRP: Return policy with Sales Rebate and Penalty; Simulation; Supply chain coordination

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.

Publication Date

1-1-2014

Publication Title

Scientia Iranica

Volume

21

Issue

6

Number of Pages

2295-2306

Document Type

Article

Personal Identifier

scopus

Socpus ID

84928260201 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/84928260201

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