Coordinating supplier-retailer using multiple common replenishment epochs with retailers’ choices

Abstract

Purpose: Provide a coordination strategy using multiple common replenishment epochs (MCRE) for a single-supplier multi-retailer supply chain.

Design/methodology/approach: The demand of a product occurs only with a group of heterogeneous and independent retailers with constant rates, whereas all their order requests are fulfilled by the supplier. The supplier decides a set of MCREs with general price and extra bonus to entice the retailers to join any one of the MCREs, or to let them remain with their original order time epochs. A retailer is willing to participate in a CRE as long as the retailer’s cost increase is within its tolerance. This paper provide a mixed integer programming to determine the MCRE strategies in order to minimize the total costs of the supplier.

Findings: The results illustrate that MCRE model provided in the paper can generate a better replenishment coordination scheme than single CRE models.

Practical implications: Replenishment coordination is one of the most important mechanisms to improve the efficiency in supply chains, e.g., chain convenience stores in the modern retail industry.

Originality/value: This is a follow-up research on Joint Economic Lot Size (JELS) models with a focus on multiple retailers with their replenishment coordination.