Abstract
AbstractThis paper deals with a two-layer supply chain composed of one manufacturer and one retailer for single-type product. The demand function of the end customers depends on quality, warranty, and sales price of the product. The profit functions of the manufacturer and the retailers are maximized under centralized and decentralized approaches. Our study suggests that the joint profit in centralized system is always more than the decentralized system. Finally, the surplus profit in centralized system is shared according to their profits in decentralized system.
Highlights
In competitive business environment, supply chain management has attracted scientists and industrial engineers owing to meet effectively the customers’ demand
This study empirically examines the extent to which pricing decision, warranty period, and level of quality are incorporated in demand, and how they impact on business performance
In this research work, a mathematical model has been developed for determining optimal selling price of the product, level of quality, and length of warranty period in a two-echelon supply chain
Summary
Supply chain management has attracted scientists and industrial engineers owing to meet effectively the customers’ demand. Shibaji Panda is an associate professor in the Department of Mathematics, Bengal Institute of Technology, Kolkata, India His main area of research is production and inventory control, supply chain management, and multi-objective optimization. The model investigates profit maximization problem for a demand function which addresses three major issues of a supply chain namely, price, quality level, and warranty period. Starbird (2001) has developed supply chain contracts considering penalties, rewards, and inspection: provisions for quality In this model, they have examined the effects of rewards, penalties, and inspection policies on the behavior of an expected cost minimization of the supplier. This study empirically examines the extent to which pricing decision, warranty period, and level of quality are incorporated in demand, and how they impact on business performance. Notation The following notations are used to develop the proposed model
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