Abstract
In this study, we propose an economic order quantity inventory model of multi-items in a two-layer supply chain where demand is sensitive to promotional effort. In this inventory model, the supplier offers a delay period to the retailer for paying the outstanding amount of the purchasing cost for the finished products. The profit functions of the supplier and the retailer are formulated by considering the setup cost, holding cost, selling price, and promotional cost shared by the members. We also compare collaborative and non-collaborative systems in terms of their average profits. Numerical examples are provided to illustrate the use of the proposed model.
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