Supplier’s Free Shipping Quantity

The development of global economic integration makes the competition among theenterprises become more intense, and the competition between enterprises has become thecompetition between supply chains. Supply chain management appears as the times require, andit has already become the direction of enterprise development. Under the mode of supply chainmanagement, inventory management and control has become the important contents of thesupply chain management, and it not only effects the cost of enterprises, but the performance ofthe supply chain. A good inventory management mode can reduce the total cost of supply chain,improve the operation efficiency of the supply chain and increase the profit of the supply chain.Inventory too much or too little can greatly weaken the gain ability of the enterprise and thecompetition ability of market. Therefore, achieving the balance of production and sale andestablishing the optimal inventory control system have become the core issues of enterprises.This paper studies supply chain with suppliers and retailers. we establish a free shippingoptimal model for the least order size from the Supplier’s perspective in a supply chain with onesupplier and one retailer who has random demand, we then establish a free shipping optimalmodel for the least order size from the Supplier’s perspective in a supply chain with one supplierand multiple retailers who have fixed demand. We analyze the characteristics of the models andgive the algorithms and numerical examples. The full text has been divided into three chapters.The first chapter mainly introduces the supply chain management, inventory management,price discounts, free shipping, newsboy model and some preliminary knowledge.In the second chapter, we establish a free shipping optimal model for the least order sizefrom the Supplier’s perspective in a supply chain with one supplier and one retailer who hasrandom demand, then we develop an algorithm to find the optimal solution and theoreticallyanalyze the condition under which the free shipping strategy can be used.In the third chapter, we establish a free shipping optimal model for the least order size fromthe Supplier’s perspective in a supply chain with one supplier and multiple retailers who havefixed demand, then we develop an algorithm to find the optimal solution and theoreticallyanalyze the condition under which the free shipping strategy can be used, and the numericalexamples are presented in the end.