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Representing a Mathematical Model to Determine the Optimal Policy for a Seller-Buyer Supply Chain

Masihabadi, Sina | 2009

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 39508 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Eshghi, Kourosh
  7. Abstract:
  8. In this research, we try to coordinate a seller-buyer supply chain by using general side-payment contracts in order to gain the maximum possible chain profit. In this model, we take logistics costs into consideration for both buyer and seller and regard the final demand as a decreasing function of retail price which is determined by the buyer. Both parties aim to maximize their individual profits, so we must set contractual parameters in a way that these decisions become aligned with system optimal decisions and the chain surplus profit be assigned to chain members such that they have no intention to leave the coalition. To this aim, we suggest a side- payment contract which consists of linear functions of decision variables and a constant term. By numerical analysis we show that, by using this kind of contract we can achieve a significant improvement in the chain members’ profits and so the total chain revenue. We change the contract into a quantity discount-like contract which makes the contract much easier to be implemented in real situations and making some assumptions, we extend our supply chain to include two buyers and one seller. We also perform the numerical analysis on the extended model and justify the observed trends
  9. Keywords:
  10. Game Theory ; Seller-Bayer Supply Chain ; Supply Chain Coordination ; Supply Chain Contracts

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