A supplement to ‘A generalized algebraic model for optimizing inventory decisions in a centralized or decentralized multi‐stage multi‐firm supply chain’

In this supplement, a number of integrated models under the integer multiplier coordination mechanism is generalized by allowing complete backorders penalized by not only linear but also fixed costs for some/all retailers. The optimal solution to such a three‐stage generalized model is algebraically derived, from which optimal expressions for some well‐known models are deduced. In addition, an expression for sharing the coordination benefits is modified, and a numerical example for illustrative purposes is presented. A ready future research work involving extension of the generalized model is suggested to conclude the supplement.