Supply Chain Channel Coordination

This paper focus on the problem of analyzing the impact of quantity discounts and promotions on channel coordination in a decentralizing control supply chain system. The paper presents a model for analyzing the impacts to profits of separately decision and joint decision on channel coordination in a system consisting of a supplier and retailer. We give a ways how a supplier or a buyer can structure the terms of an optimal quantity discount schedule by analyzing profits of a supplier and a retailer separately and the whole supply chain system in deciding separately and joint decision policies.Then the paper mostly concentrates impacts of quantity discount to their profit in deciding separately and joint decision policies for different products .It is shown that the sufficiency of quantity discounts as coordination mechanisms can be realized by employing franchise fees as a control mechanism to the different products. And a actual policy scheme is presented.Furthermore the paper presents, however, promotion is necessary to competition, it improves inventory cost and make the whole supply chain profits decrease. So managers should design a system to limit purchase ahead of schedule and make more discounts to customer. The price discount be fit to the product that sale to customer during promotion not product that retailer buy.