The profit-maximization model for a multi-item distribution channel

The profit-maximization model for a multi-item distribution channel

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Article ID: iaor20082150
Country: United Kingdom
Volume: 43
Issue: 4
Start Page Number: 338
End Page Number: 354
Publication Date: Jul 2007
Journal: Transportation Research. Part E, Logistics and Transportation Review
Authors: ,
Keywords: optimization
Abstract:

This study focused on an area of emerging research: managing a multi-product and multi-echelon supply chain which produces and sells deteriorating goods in the marketplace. We formulated four profit-maximization models by considering the effects of channel coordination and a joint replenishment program on the supply-side cost control, taking into account the effect of the pricing scheme on demand and revenue increments. In addition, a profit-sharing mechanism based on channel rebates is proposed, which leads to Pareto improvements among the channel participants.

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