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Coordination and Decision of Supply Chain Under: Price-Dependent Demand and Customer Balking Behavior

Coordination and Decision of Supply Chain Under: Price-Dependent Demand and Customer Balking Behavior

Guangdong Liu, Tianjian Yang, Yao Wei, Xuemei Zhang
Copyright: © 2019 |Volume: 12 |Issue: 3 |Pages: 26
ISSN: 1935-5726|EISSN: 1935-5734|EISBN13: 9781522564669|DOI: 10.4018/IJISSCM.2019070102
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MLA

Liu, Guangdong, et al. "Coordination and Decision of Supply Chain Under: Price-Dependent Demand and Customer Balking Behavior." IJISSCM vol.12, no.3 2019: pp.1-26. http://doi.org/10.4018/IJISSCM.2019070102

APA

Liu, G., Yang, T., Wei, Y., & Zhang, X. (2019). Coordination and Decision of Supply Chain Under: Price-Dependent Demand and Customer Balking Behavior. International Journal of Information Systems and Supply Chain Management (IJISSCM), 12(3), 1-26. http://doi.org/10.4018/IJISSCM.2019070102

Chicago

Liu, Guangdong, et al. "Coordination and Decision of Supply Chain Under: Price-Dependent Demand and Customer Balking Behavior," International Journal of Information Systems and Supply Chain Management (IJISSCM) 12, no.3: 1-26. http://doi.org/10.4018/IJISSCM.2019070102

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Abstract

In order to investigate supply chain coordination and decision under customer balking and stochastic demand, the article considers a two-echelon supply chain consisting of one manufacturer with risk-neutral and one retailer with risk-neutral and develops two models in a centralized and a decentralized system and the three contracts are designed to coordinate supply chain and the optimal price and customer balking strategies are obtained. The results show that the revenue and cost-sharing contract can coordinate supply chain under customer balking and price-dependent demand and achieve the Pareto-improvement; the expected sales quantity and expected reduced sales quantity are influenced conversely by the threshold of inventory and probability of a sale under customer balking. In addition, numerical analysis is given to verify the effectiveness of revenue and cost-sharing contract and the paper gives some managerial insights and puts forward to the future work at last.