Simultaneous coordination of order quantity and reorder point in a two-stage supply chain

Publication year: 2011
Source: Computers & Operations Research, Volume 38, Issue 12, December 2011, Pages 1667-1677

S., Kamal Chaharsooghi , Jafar, Heydari , Isa, Nakhai Kamalabadi

In this paper, we investigate the simultaneous coordination of order quantity and reorder point in a two-stage supply chain (SC). While coordination of order quantity has received much attention in the supply chain management literature, coordination of the reorder point has been less-studied. The retailer’s reorder point has a direct impact on product availability and customer service level (CSL) and therefore has a great impact on SC profitability. Our proposed model adopts a two-stage SC with stochastic demand and lead times over multiple periods. The proposed coordination model assures global optimization of order quantity–reorder point decisions. Using a pricing scheme…