Multi-stage Selling-replenishment Models And Supply Chain Coordination For The Ameliorating Items

With the continuous development of the economy and the advancement of scienceand technology, the living standard of people has been improved continuously, thedemand of consumers tends to be diversified and personalized, the kinds of goodsbecome more and more. Deteriorating items are those goods that their value or utility orquantity of some commodities decreases with time. Milk, fresh vegetables, flowers,alcohol, gasoline, radioactive chemicals and electronic products are examples ofdeteriorating items. It is also observed in the marketplace that the value or utility orquantity of some commodities increases with time.These items include the fast growinganimals like chicken, duck, pigs, etc. in poultry farm, high breed fishes in pond, etc.These items can be termed as ameliorating items. Amelioration of the amelioratingitems is the same important as the deterioration of the deteriorating items. The topic ofthe deteriorating items and their supply chain has attracted the attentions of more andmore scholars. However, a closely related topic about the ameliorating items and theirsupply chain has never attracted enough academic attention.This paper, which is based on the characteristics of amelioration of theameliorating items, studies the multi-stage selling-replenishment models for theameliorating items taking account of the funding constraints, then discusses the contractcoordination problem for the different modes of ameliorating items’ supply chains.Specific work as follows:Firstly, this study develops four multi-stage selling-replenishment models for theameliorating items from the perspective of the supplier. In addition, the replenishment isconsidered in the last two models. The models considered the ameliorating effects andfunding constraints. Moreover, we consider the ordering cost, selling cost, inventoryholding cost and amelioration cost. The aim of those models is used to obtain themaximum total profit of the ameliorating items supplier. The numerical examples aregiven to illustrate that the models is very effective. In order to study how variousparameters affect the optimal solution of the proposed models, sensitivity analysis isalso performed.Secondly, the revenue sharing contracts for the supply chain of ameliorating itemswith a fixed planning horizon are studied. When the retailer adopts the strategy withunallowable shortages and one order，the optimal planning horizon and the order quantity are given in decentralized decision mode and centralized decision mode. Whenthe retailer respectively adopts the strategy with allowable shortages and one order andthe strategy with unallowable shortages and two order, the optimal order points aregiven in decentralized decision mode and centralized decision mode. The revenuesharing contracts based on the order points for supply chains of ameliorating items aredeveloped and the scopes of the revenue sharing coefficient are deduced. By analysis ofan example, it reveals that the strategy with allowable shortages and one order based onthe revenue sharing contract is the optimal. Sensitivity analysis with respect to theparameters also is performed.Thirdly, a two-echelon supply chain of ameliorating items under the assumption ofthe lot-for-lot policy is presented. The unit time total costs are given in decentralizeddecision mode and centralized decision mode, and also the impacts of amelioration rateand demand rate on them are given. The coordination problem of the supply chain isstudied. The optimal strategy is achieved with quantity discount provided by thesupplier. The numerical example is given to illustrate that the optimal strategy is veryeffective in improving the coordination of the supply chain. The sensitivity of the totalcost of the supply chain with respect to amelioration rate and demand rate has also beenpresented.Lastly, suppose that the supplier adopt the strategy with large-scale ordering andlot-splitting in order to reduce the cost through scale economy. Using order cycle as thedecision variable and not considering quantity discount, the unit time total costs of theretailer, the supplier and the supply chain are given respectively. Further, the unit timetotal cost of the supply chain with quantity discount is deduced. And the correspondingalgorithms are designed which are used to derive the solution of the models. Thenumerical example is given to illustrate that the optimal strategy is very effective inimproving the coordination of the supply chain. The sensitivity of the total cost of thesupply chain with respect to demand rate and amelioration rate has also been presented.