Title: An inventory model and supply chain coordination for ameliorating items allowing for shortages under non-instantaneous replenishment

Authors: Yunfeng Zhang; Ying Qin

Addresses: School of Economics and Management, Anhui Polytechnic University, Beijing Middle Road, Wuhu, Anhui Province, China ' School of Economics and Management, Anhui Polytechnic University, Beijing Middle Road, Wuhu, Anhui Province, China

Abstract: This study constructs an ameliorating item supply chain consisted of a single supplier and a single retailer. The replenishment from the supplier to the retailer takes a while to complete. The retailer is allowed to run out of stock. We analyse the order cycle, the profit of the supply chain system and the profit for each member under the cooperative and the non-cooperative decision-making conditions respectively. The results show that the profit of the supply chain system per unit time is higher under the cooperative decision making than under the non-cooperative decision making. However, compared with the latter, the former will lead to a decrease in the supplier's profit per unit time. To make up for the supplier's loss, a revenue-sharing contract is designed to coordinate the ameliorating item supply chain. The equilibrium solution is given by using the Nash bargaining theory. A numerical example is used to verify the main conclusions.

Keywords: ameliorating items; supply chain coordination; inventory; revenue-sharing contract.

DOI: 10.1504/IJMOR.2024.141472

International Journal of Mathematics in Operational Research, 2024 Vol.29 No.1, pp.25 - 50

Received: 06 Dec 2022
Accepted: 23 Dec 2022
Published online: 16 Sep 2024 *

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