Optimal ordering and pricing models of a two-echelon supply chain under multipletimes ordering

Abstract

<p style='text-indent:20px;'>This paper studies ordering and pricing issues under multiple times ordering. A manufacturer and a retailer are involved in our discussion. The definition of a reasonable price is given based on the practical requirement. First, we construct a Stackelberg model in which the manufacturer and the retailer make their decisions respectively. During the process of derivation, both ordering time-points and optimal prices are expressed as functions of number of times of ordering. By solving a quadratic programming model with an undetermined parameter, we demonstrate that the optimal ordering time-points of the retailer are equidistant time points on the given selling period. Second, a cooperative model is developed in which the manufacturer and the retailer jointly make decisions. It is shown that the optimal retail price is lower and the number of times of ordering is more in the cooperative situation than the noncooperative one. Further, an allocation method based on revenue proportions is proposed.</p>