Joint optimization of production, transportation and pricing policies of complementary products in a supply chain

Research paper by Navid Dehghanbaghi, Mohsen S. Sajadieh

Indexed on: 07 Apr '17Published on: 16 Mar '17Published in: Computers & Industrial Engineering


In this paper, we consider the joint optimization of production, inventory, transportation and pricing policies in a multi-product two-stage supply chain. The products are complementary and their demands are not only dependent on their own price but also on their complementary product price. Mathematical model of the problem is presented in both centralized and decentralized supply chains. Exact algorithms are presented using mathematical and convexity analysis to solve mixed integer nonlinear models. Numerical studies show that the profit of centralized supply chain is more stable compared to decentralized supply chain when the dependency rate of products changes.

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