ISSN: 2225-8329
Open access
We study a one-manufacturer and one-retailer type of supply chain that the manufacturer manufactures two newsvendor-type items and offers a buy-back contractual commitment to the retailer who sells the items in a stochastic demand market with various prices, allowing demand leakage from high-priced item to low-priced one. The objective of this study is to coordinate the chain by jointly determining wholesale prices, buy-back prices, retail prices and order sizes. We first derive a succinct model for the chain in which the manufacturers expected profit subject to the retailer’s optimal expected profit will be explored. And a solution method to the case of uniformly distributed error demand is subsequently proposed; accordingly, a series of examples along with graphical concavity and satisfying constraint of the manufacturer’s expected profit are conducted to validate our solution method.
Arcelus, F. J., Kumar, S., Srinivasan, G. (2008). Evaluating manufacturer’s buyback policies in a single-period two-echelon framework under price-dependent stochastic demand. Omega, 36, 808-824.
Bell, P. C. (1998). Revenue management: That’s the ticket. OR/MS Today, 25(2), 18.
Bose, I., & Anand, P. (2007). On returns policies with exogenous price. European Journal of Operational Research, 178, 782-788.
Gerchak, Y., Parlar, M., Yee, T. K. M. (1985). Optimal rationing policies and production quantities for products with several demand classes. Canadian Journal of Administrative Science, 2, 161-176.
Lariviere, M. A. (1999). Supply chain contracting and coordination with stochastic demand. Quantitative Models for Supply Chain Management, Kluwer Academic Publishers: Boston. 233-268.
Lariviere, M. A., & Porteus, E. L. (2001). Selling to the newsvendor: An analysis of price-only contracts. Manufacturer and Service Operations Management, 3(4), 293-305.
Lau, H. S., & Lau, A. H. L. (1999). Manufacturer’s pricing strategy and return policy for a single period commodity. European Journal of Operational Research, 116, 291-304.
Lau, A. H. L., Lau, H. S., Willett, K. D. (2000). Demand uncertainty and returns policies for a seasonal product: An alternation model. International Journal of Production Economics, 66, 1-12.
Mills, E. S. (1959). Uncertainty and price theory. Quarterly Journal of Economics, 73(1), 116-136.
Netessine, S., & Rudi, N. (2003). Centralized and competitive inventory models with demand substitution. Operations Research, 51: 329-335.
Parlar, M. (1988). Game theoretic analysis of the substitutable product inventory problem with random demands. Naval Research Logistics, 35, 397-409.
Pasternack, B. A. (1985). Optimal pricing and return policies for perishable commodities. Marketing Science, 4,166-176.
Petruzzi, N. C., & Dada, M. (1999). Pricing and the newsvendor problem: A review with extensions. Operations Research, 47(2), 183-194.
Pfeifer, P. (1989). The airline discount fare allocation problem. Decision Science, 20, 149-157.
Serel, D. A. (2008). Inventory and pricing decisions in a single-period problem involving risky supply. International Journal of Production Economics, 116, 115-128.
Serin, Y. (2007). Competitive newsvendor problems with the same Nash and Stackelberg solutions. Operations Research Letters, 35: 83-94.
Shi, C., & Chen, B. (2007). Pareto-optimal contracts for a supply chain with satisficing objectives. Journal of the Operational Research Society,58, 751-759.
Thowsen, G. T. (1975). A dynamic, nonstationary inventory problem for a price/quantity setting firm. Naval Research Logistics Quarterly, 22(3), 461-476.
Tsay, A. A. (1999). The quantity flexibility contract and supplier-customer incentives. Management Science, 45(10), 1339-1358.
Tsay, A. A. (2001). Managing retail channel overstock: Markdown money and return policies. Journal of Retailing, 77, 457-492.
Wang, D., Tang, O., Huo, J. (2013). A heuristic for rationing inventory in two demand classes with backlog costs and a service constraint, Computers and Operations Research, 40, 2826-2835.
Yao, Z., Leung, S. C. H., Lai, K. K. (2008). Analysis of the impact of price-sensitivity factors on the returns policy in coordinating supply chain. European Journal of Operational Research, 187, 275-282.
Zhang, M., & Bell, P. C. (2007). The effect of market segmentation with demand leakage between markets segments on a firm’s price and inventory decisions. European Journal of Operational Research, 182, 738-754.
Zhang, M., Bell, P. C., Cai, G., Chen, X. (2010). Optimal fences and joint price and inventory decisions in distinct markets with demand leakage. European Journal of Operational Research, 204, 589-596.
In-Text Citation: (Pourmozafari et al., 2014)
To Cite this Article: Pourmozafari, A., Heyrani, F., & Moeinadin, M. (2014). The Examination of Relationship between Intellectual Capital and Financial Performance According to the Modulating Role of Competitive Advantage. International Journal of Academic Research in Accounting Finance and Management Sciences. 4(1), 546– 559.
Copyright: © 2014 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode