I-Ping Huang
Department of Industrial Engineering and Management, Yuan-Ze University, 135 Yuan-Tung Road, Chung-Li, 320, Taiwan
Chiuh-Cheng Chyu
Department of Industrial Engineering and Management, Yuan-Ze University, 135 Yuan-Tung Road, Chung-Li, 320, Taiwan
ABSTRACT
In this study, we present a single-period supplier-profit-oriented newsvendor supply chain problem in a stochastic demand framework, where market price will impact demand in multiplicative form. The Weibull distribution is chosen, since this inter-relationship will affect the scale parameter of the distribution. The model is game-theoretic. The supplier determines the wholesale price, whereas the retailer will respond with a market price and order quantity that maximize his own profit. The bargaining process ends when the supplier finds a wholesale price, which maximizes his sales profit minus product quality cost. The quality cost includes inspection cost and penalty cost of selling defective products to customers. Influence diagram is used to model a Bayesian inspection sampling plan that reduces product quality risk. Our model integrates market risk and product quality risk. We also analyze how the model parameters impact the optimal supply chain decisions and supply chain performance. The results show the effectiveness of the quantity discount strategy and product quality on the supply chain benefits in the proposed model.
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How to cite this article
I-Ping Huang and Chiuh-Cheng Chyu, 2013. A Wholesale Price-Based Coordination Scheme to Optimize Supplier Profit in Newsvendor Problems. Journal of Applied Sciences, 13: 4812-4818.
DOI: 10.3923/jas.2013.4812.4818
URL: https://scialert.net/abstract/?doi=jas.2013.4812.4818
DOI: 10.3923/jas.2013.4812.4818
URL: https://scialert.net/abstract/?doi=jas.2013.4812.4818
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