Supply Chain Coordination With Quantity Discount Policy And Transportation Costs

In the 21st century, with the development of information, supply chain management has been full of temptation. It is a symbol of management and a new productivity. Supply chain management has given us not only a new management tools, but also more importantly the opportunity of updating management and raising awareness. Meanwhile, it provides a new way to re-plan, design and optimize the business processes. The integral supply chain coordination has been regarded as the core strategy for an enterprise to win. During the constant process of the pursuit for a faster speed, a lower price and a nicer service, the managers recognize that it is difficult to reach the goal only by working isolated. Conversely, to reach the aim, each company must work together on the basis of cooperation.The purpose of this thesis is to study supply chain coordination by the use of optimization theory and algorithm.We first give a review to the situation of supply chain management and then focus our attention on the quantity discount strategy in supply chain coordination. We also discuss how to price service products with price-dependent demand in the lead time.In the first part, we propose a two-stage supply chain model with random demand, transportation costs as an important part of the total costs. Our result shows that good quantity strategy will force the supply chain to be coordinated. We also give a distribution mechanism that enhances the profit of suppliers and retailers.The second part is concerned with optimal price related to service products. We establish a mathematics model for the case where the demands depend on the price. We also consider the probability of ordering cancellation. We provide a new way to find the optimal solution. Our numerical results show that the model is practicable.