A study on lead-time discount coordination for deteriorating products

Yeu Shiang Huang, Wei Jun Su, Zu Liang Lin

Research output: Contribution to journalArticlepeer-review

23 Citations (Scopus)

Abstract

Goods flowing through supply chains usually deteriorate. Such goods may corrupt, volatilize, and degenerate over time and thus cause the decline of their values or quantity. This study focuses on lead-time coordination for supply chains with deteriorating products which facilitates member cooperation and long-time relationships, thus increasing profit for the entire supply chain. A two-level supply chain with a single supplier and a single retailer is considered, in which the product deteriorates in the same manner for both the supplier and retailer, which is allowed to have shortages. A lead-time discount coordination strategy is used to maximize the profit of the entire supply chain by appropriately determining the optimal order quantity and lead-time. A numerical example is given, and sensitivity analyses are performed to analyze the influence of various parameters on the overall profit. The results can help managers establish long-term cooperative relationships in supply chains.

Original languageEnglish
Pages (from-to)358-366
Number of pages9
JournalEuropean Journal of Operational Research
Volume215
Issue number2
DOIs
Publication statusPublished - 2011 Dec 1

All Science Journal Classification (ASJC) codes

  • Computer Science(all)
  • Modelling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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