A Two-Echelon Inventory Model for Seasonal Products under Demand Uncertainty

Abstract

A major objective of supply chain management is to improve the performance of the whole supply chain. In a two-echelon supply chain of seasonal products controlled by a pure wholesale price contract, double marginalization can not be avoided. A wholesale price discount contract is introduced to improve the performance of the supply chain. By adjusting the contract parameters, the supplier can coordinate the supply chain and arbitrarily divide the total expected profit between the two supply chain members. All our findings are illustrated by a numerical example.