A three-echelon supply chain coordination with quantity discounts for multiple items

Ching Ter Chang, Chei Chang Chiou, Ya Wen Yang, Shu Chin Chang, Wanncherng Wang

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

This study derives an integrated model for three-echelon supply chain (i.e. single-supplier, single-vendor and multi-retailer) to minimise the joint costs of all participants associated with holding costs, ordering costs, and purchasing costs. We particularly emphasise that quantity discounts and joint replenishment policies can be utilised as coordination mechanisms among all parties. In addition, a linearisation approach and mixed integer method are developed not only to obtain an executable integer solution for a finite planning horizon problem but also to simplify the conventional multiple-step procedure used in the quantity discount. The result indicates that the coordination and consolidation of orders can lead to the total cost reduction. Finally, a numerical example is given to illustrate the benefits of orders coordination and consolidation.

Original languageEnglish
Pages (from-to)561-573
Number of pages13
JournalInternational Journal of Systems Science
Volume41
Issue number5
DOIs
Publication statusPublished - 2010 May 1

All Science Journal Classification (ASJC) codes

  • Control and Systems Engineering
  • Theoretical Computer Science
  • Computer Science Applications

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