Coordination And Optimization Model Of Three-echelon Integrated Cold Chain Inventory

With the gradual improvement of living standards, people’s demand on food becomes higher, especially for cold chain products, such as seafood, fruits, vegetables, etc. The development of economy makes the intensifying competition between the supply chain,single level competition is gradually transformed into the competition of the whole supply chain. The research of cold chain inventory shows that the integration of supply chain inventory can greatly promote the overall competitiveness of the supply chain, but will harm the interest of some members. In order to enhance the stability of the supply chain, it is necessary to study the integration of supply chain coordination and optimization strategy.An inventory ordering and pricing policy for deteriorating items which has Weibull survival and death characteristics and continuous stochastic demands influenced by price during an infinite time- horizon is discussed. In the system, the demand rate is exponential function of price while the deteriorating rate obeys three parameters Weibull distribution and replenishment lead time is a fixed variable. The objective is to maximize the system’s total average expected profit based on a continuous review(R, Q) policy. The Direct Approach-Taylor series expansion is applied which can avoid the complexity of solving stochastic differential equations to obtain the optimal strategy. Some conclusions are obtained by using the matlab and sensitivity analysis in numeric examples simulation.First, with the increase of the replenishment lead time and unit warehousing costs, the average profit is decreasing. Second, the increase of the unit processing costs affects the replenishment quantity within some limits, and eventually leads to the decline of the system average profit. Third, with a fixed shelf life time, the environment factors have negative correlation with the average profit. These discoveries are good for the improvement of the model and have certain guidance to the real problems.A revenue sharing contract and buyback contract for three-echelon integrated cold chain inventory system with stochastic lead time during an infinite time-horizon are established. For better analysis the characteristics of the cold chain inventory operation, it assumes that the unsold cold chain products at the retailers sell at lower price when newfresh goods arrive/at the end of the lead time. Firstly, the inventory model established fully considers the value-added services and all kinds of DC’s operating costs and the demand randomness of retailers. Secondly, to find the optimal system order point, revenue sharing rate, buyback price and price discount rate, a decision basis built is to maximize the system’s total average expected profit while increasing all members’ profit based on continuous review(R, Q) policy with an additive deterioration on consumption rate from downstream to upstream and a price sensitive demand rate. Thirdly, Genetic Algorithm adopted to approximately solve the stochastic inventory model. A numerical analysis demonstrates that each member’s average expected profit is more than that of decentralized policy under revenue sharing contract compared with the simple integrated system. Flexibility analysis also illustrates that on the one hand, retailers could not unilaterally increase the retail price, otherwise, new un-equilibrium occurs, on the other hand, DC should let the suppliers and retailers share the volume freight rate to increase their profit so as to make the long-term stable relationship into practice.