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Chinese Journal of Management Science ›› 2019, Vol. 27 ›› Issue (12): 55-66.doi: 10.16381/j.cnki.issn1003-207x.2019.12.006

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The Level Coordination for the Ameliorating Items Supply Chain Considering Ordering Coordination Cost and Quantity Discount

ZHANG Yun-feng1,2, WANG Yong2, GONG Ben-gang1, DAN Bin2   

  1. 1. School of Management Engineering, Anhui Polytechnic University, Wuhu 241000, Chian;
    2. School of Economics and Business Administration, Chongqing University, Chongqing 400030, China
  • Received:2018-04-14 Revised:2018-11-03 Online:2019-12-20 Published:2019-12-30

Abstract: Joint replenishment is a form of replenishment in which more than two enterprises with the same product demand work together to formulate purchasing strategies. Joint replenishment tends to make order quantity multiply, and enjoys the supplier's price discount more easily. so the retailers favor this replenishment mode. The limitations of joint replenishment are that the retailers involved in joint replenishment need to change their original purchasing rhythm and generate additional order coordination costs. Moreover, the order coordination cost of joint replenishment usually increases with the increasing of the retailers in the procuring organization. Clearly, large order coordination costs will undermine the benefits of price discounts strategie.
The ameliorating items are a special kind of products. During the period of holding, the ameliorating items will cause ameliorating phenomenon, and lead to ameliorating cost which affects the plenishment decision of retailers. Amelioration phenomena do exist in industries such as farming, fisheries, and poultry farming. Fast growing livestock such as ducks, pigs, broiler in poultry farms, hybrid fish in ponds and the culture of vegetables, fruits on farms are some examples. The phenomenon of amelioration is the opposite of deterioration and the modeling of it deserves an in-depth study.
Considering a two-echelon supply chain of ameliorating items consisted of a single supplier and multiple retailers, the supplier provides quantity discount strategy to attract the retailers to increase order quantity. Each retailer is faced with two replenishment modes:independent replenishment and joint replenishment. If the retailers choose independent replenishment, the quantity of each order would be smaller and the price discount offered by the supplier might not be available. However, in the case of joint replenishment, the retailers will have to share order coordination costs. The function of total profit per unit time of independent replenishment and joint reolenishment for the retailers respectively are established. The optimal order cycle and maximum total profit per unit time under two replenishment mode are obtained. By comparing the maximum total profit per unit time of the two replenishment modes, the condition that the joint replenishment is superior to the independent replenishment is obtained. On this basis, the joint replenishment behavior among the retailers is transformed into a multi-player cooperative game problem. The basic properties of the game are proved, and the profit distribution method based on the core of the game is designed. Finally, a numerical example and sensitivity analysis are given to illustrate the correctness of the proposed model.

Key words: joint replenishment, ameliorating items, supply chain, quantity discount, level coordination

CLC Number: