Researches On Supply Chain Coordination Strategy With Inventory-Level-Dependent Demand

The studied title is come from the PhD. Programs Foundation of Ministry of Education of China (grant number: 20060359007): supply chain coordination with an inventory-level-dependent demand rate and National Natural Science Foundation Project (grant number: 70471045): supply chain coordination and quantity discount research based on stochastic demand and asymmetric information.With the rapid development of Science & Technology, the globalization of the market economy, the competition is not among enterprises, but among supply chains. Therefore, Supply Chain Management (SCM) becomes a new enterprise-operating philosophy. Amongst various entities and functional units along a supply chain, tight activity coordination pattern is needed to achieve a global performance optimization in order to server the market better. Therefore, studying the coordination of supply chain is very significant for the total cost of supply chain system. Also, it is a hot spot of SCM research.During recent years, the research on supply chain coordination that has made much more progress is based on constant demand or price-sensitive demand or random demand. But none is based on inventory-level-dependent demand. So, the paper studies supply chain coordination with inventory-level-dependent demand. The details are given as bellows.1. Based on initial-inventory-dependent demand, the coordination strategy of supply chain is studied. Firstly, under the assumption that the demand is dependent on the amount of inventory displayed on the retailer's shelf and retail price, supply chain coordination model is offered that can achieve the perfect coordination with utilizing incremental quantity discount. Then, under the situation of considering initial-inventory-dependent demand that the retailer faces, product's retail price related to its storage time, limited warehouse capacity and no shortage, the supply chain coordination model is presented. Quantity discount strategy is given that can realize the perfect coordination of supply chain system. The existence of optimal strategies is proved theoretically, and the simple resolving method is provided. A numeric example interprets the above conclusion.2. The coordination strategy of supply chain system is studied under the situation of considering linearly stock-dependent demand, the deteriorating products and (S, s) strategy that the retailer adopts. All quantity discounts is offered to achieve the prefect coordination of supply chain. The uniqueness and existence of optimal strategies are testified theoretically, and the simple resolving method is afforded.3. The coordination model of supply chain is presented that demand is assumed to be the power function of inventory level. Under the situation of considering shortages isn't permitted and the supplier's replenishment period is set at integer multiple of the retailer's replenishment period, the coordination strategies are considered with using volume quantity discount. Its necessary condition is developed to achieve the perfect coordination. Respectively, we discuss quantity discount plan in the supply chain can and cannot be the perfect coordination. Sensitivity analysis with the numerical example shows that the perfect coordination of supply chain is very sensitive to the demand parameter and the purchasing cost unit item.The research results presented above not only enrich the content of SCM but also widen the applied areas of the supply chain coordination model, and provide scientific evidence for decision makers.