PRICING DISCOUNT FOR A SUPPLY CHAIN COORDINATION POLICY WITH PRICE DEPENDENT DEMAND

Pricing policy of an enterprise has great influenced the development of a supply chain coordination strategy. The joint decision policy characterized by the selling price, order quantity and replenishment schedule is coordinated through pricing discount. The major aim of this study is to develop an optimum replenishment and pricing policy by maximizing the supplier, manufacturer and retailer's shared profit in a price-sensitive demand with reciprocal collaboration. This study develops a mathematic supply chain inventory model that concurrently decides the discount price, the number of deliveries and the ordering cycle time with linearly declining price dependent demand under different profit-sharing ratios. A numerical example explicates the theory with different profit-sharing ratios and negotiation factors.