Supply Chain Coordination Model With Stock-dependent Demand And Transportation Cost

In recent decades, the market researchers find the demand of some products is influenced by the quantity of the shelf display. Gupta and Vrat first introduced the phenomenon in the inventory model in 1986. Then many scholars developed some more complex models to solve the practical problems faced in the production and operation of enterprises. The inventory costs and transportation costs account for a large proportion in the supply chain cost. But most previous studies for two-echelon supply chain model with stock-dependent demand did not consider the product transportation cost, or just assumed that the transportation cost is a constant. In this paper, two aspects of the main work has been done:(1)Assume the transportation cost is a function of the quantity of the goods. A two-level supply chain coordination model with single manufacturer and single retailer is developed under the assumption that the demand is stock-dependent and variable holding cost is considered. A split of total freight policy that can coordinate the supply chain perfectly is proposed for the manufacturer.(2)For a decentralized supply chain consisting of a single supplier and multi-retailers the supply chain coordination problem with a stock-dependent market demand is considered. First in a distributed system, the profit models of the supplier and retailers are established and a modified nearest algorithm is proposed to reduce transportation cost and enhance the whole profit of the supply chain. A proper pricing strategy is used to realize "multi-win" and improving the coordination of the supply chain.