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Analysis of a quantity-flexibility supply contract with postponement strategy
Zhen Li1; Zhaotong Lian1; Wenhui Zhou2
2010
Conference Name2010 IEEE International Conference on Management of Innovation & Technology
Source Publication2010 IEEE International Conference on Management of Innovation & Technology
Conference Date2010-06
Conference PlaceSingapore, Singapore
Abstract

This paper studies a supply contract between a manufacturer and a retailer in the cosmetics industry under which a retailer receives discounts for committing to purchase products before the point of differentiation. The retailer can adjust the order quantities after the trial period based on updated demand forecast information and inventory status by paying a higher per-unit cost for the incremental units or giving up the deposit. Such contracts are popular in the cosmetics industry based on fast-moving consumer goods. Given the manufacturer’s price structure, we first develop a two-period dynamic programming model to the optimal replenishment strategy for the retailer. We then further derive the quantity of the common material for the manufacturer satisfying a certain service level. Numerical results show difference in material quantities with and without using postponement strategy.

KeywordSupply Contract Inventory Postponement Material Commonality Dynamic Programming
DOI10.1109/ICMIT.2010.5492751
Language英語English
Scopus ID2-s2.0-77954892342
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Citation statistics
Document TypeConference paper
CollectionDEPARTMENT OF ACCOUNTING AND INFORMATION MANAGEMENT
University of Macau
Affiliation1.Faculty of Business Administration, University of Macau
2.School of Business Administration, South China University of Technology
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Zhen Li,Zhaotong Lian,Wenhui Zhou. Analysis of a quantity-flexibility supply contract with postponement strategy[C], 2010.
APA Zhen Li., Zhaotong Lian., & Wenhui Zhou (2010). Analysis of a quantity-flexibility supply contract with postponement strategy. 2010 IEEE International Conference on Management of Innovation & Technology.
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