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Quantity Discount Strategy for Coordinating a Three Level Supply Chain with Fuzzy Random Demand
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WANG Chuanxua,JIANG Liangkuib
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(a.School of Economy and Management; b.Liberal Arts & Science College,
Shanghai Maritime University, Shanghai 200135, China)
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Abstract To analyze the coordination strategy for three level supply chain with fuzzy random demand, the quantity discount coordinating model for a three level supply chain consisting of a supplier, a manufacturer and a retailer was developed, in which the order quantity and reorder point are decision variables. The cost functions of individual members and supply chain were obtained and the corresponding algorithm was developed to find the optimal solution to the model. At last, a numerical example was given to demonstrate the effectiveness of the proposed model. The numerical analysis shows that incorporating quantity discounts can reduce three level supply chain cost , and incorporating quantity discounts into both upstream and downstream of the manufacturer can significantly decrease supply chain costs compared to concentrating only on the downstream. The cost of three level supply chain with fuzzy random demand is greater than that of three level supply chain with random demand.
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Received: 01 February 2010
Published: 31 December 2010
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