The Stock and the Purchase Strategy on the Nonlinear Diversification of Price to Time with Retailer Dominating

Abstract

With the socio-economic changing, the retailer plays a more significant role in the supply chain. In this paper, a scenario is considered in which the retailer dominates a two-echelon supply chain which consists of one retailer and some manufacturers, and the price of raw materials is a nonlinear function to time. The retailer first determines the order quantity and the retail price, and then places some orders to the manufacturers. Then the manufacturers have to decide whether to accept the orders according to the enterprise profit and production capacity. We mainly develop the supply chain members’ profit models and derive the retailer’s optimal ordering quantity and retail price and the manufacturers’ optimal orders which they accepted to maximize their profits.