Abstract
Reducing the system cost and achieving significant profit are the key factors for every successful business sector. A consignment contract under distribution-free approach may be a fruitful combination to achieve a profitable business. This model deals with a single-period newsvendor problem with a consignment policy. The consignment policy is an agreement between any two parties, named as the consignor and the consignee. Under Stackelberg approach, firms act as leader and follower. Both parties carry some parts of the holding cost instead of one. A new policy for paying the fixed fee to the consignee is introduced. This paper considers no specific probability distribution for customer’s demand except a known mean and standard deviation. An efficient approach is proposed to reduce the retailer’s cost and building a sustainable consignment contract. The solution of this model is obtained using distribution free approach. A comparison between the traditional supply chain policy and the consignment policy is established. The price-sensitivity on demand is analysed. Some numerical examples and graphical representations are given for both traditional and consignment policy. Result proves that consignment policy is dominating over the traditional policy and a significant reduction of retailer’s royalty is found.
| Original language | English |
|---|---|
| Pages (from-to) | 5025-5044 |
| Number of pages | 20 |
| Journal | International Journal of Production Research |
| Volume | 56 |
| Issue number | 15 |
| DOIs | |
| Publication status | Published - 2018 Aug 3 |
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All Science Journal Classification (ASJC) codes
- Strategy and Management
- Management Science and Operations Research
- Industrial and Manufacturing Engineering
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A distribution free newsvendor model with consignment policy and retailer’s royalty reduction. / Sarkar, Biswajit; Zhang, Chong; Majumder, Arunava; Sarkar, Mitali; Seo, Yong Won.
In: International Journal of Production Research, Vol. 56, No. 15, 03.08.2018, p. 5025-5044.Research output: Contribution to journal › Article
TY - JOUR
T1 - A distribution free newsvendor model with consignment policy and retailer’s royalty reduction
AU - Sarkar, Biswajit
AU - Zhang, Chong
AU - Majumder, Arunava
AU - Sarkar, Mitali
AU - Seo, Yong Won
PY - 2018/8/3
Y1 - 2018/8/3
N2 - Reducing the system cost and achieving significant profit are the key factors for every successful business sector. A consignment contract under distribution-free approach may be a fruitful combination to achieve a profitable business. This model deals with a single-period newsvendor problem with a consignment policy. The consignment policy is an agreement between any two parties, named as the consignor and the consignee. Under Stackelberg approach, firms act as leader and follower. Both parties carry some parts of the holding cost instead of one. A new policy for paying the fixed fee to the consignee is introduced. This paper considers no specific probability distribution for customer’s demand except a known mean and standard deviation. An efficient approach is proposed to reduce the retailer’s cost and building a sustainable consignment contract. The solution of this model is obtained using distribution free approach. A comparison between the traditional supply chain policy and the consignment policy is established. The price-sensitivity on demand is analysed. Some numerical examples and graphical representations are given for both traditional and consignment policy. Result proves that consignment policy is dominating over the traditional policy and a significant reduction of retailer’s royalty is found.
AB - Reducing the system cost and achieving significant profit are the key factors for every successful business sector. A consignment contract under distribution-free approach may be a fruitful combination to achieve a profitable business. This model deals with a single-period newsvendor problem with a consignment policy. The consignment policy is an agreement between any two parties, named as the consignor and the consignee. Under Stackelberg approach, firms act as leader and follower. Both parties carry some parts of the holding cost instead of one. A new policy for paying the fixed fee to the consignee is introduced. This paper considers no specific probability distribution for customer’s demand except a known mean and standard deviation. An efficient approach is proposed to reduce the retailer’s cost and building a sustainable consignment contract. The solution of this model is obtained using distribution free approach. A comparison between the traditional supply chain policy and the consignment policy is established. The price-sensitivity on demand is analysed. Some numerical examples and graphical representations are given for both traditional and consignment policy. Result proves that consignment policy is dominating over the traditional policy and a significant reduction of retailer’s royalty is found.
UR - http://www.scopus.com/inward/record.url?scp=85041922537&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85041922537&partnerID=8YFLogxK
U2 - 10.1080/00207543.2017.1399220
DO - 10.1080/00207543.2017.1399220
M3 - Article
AN - SCOPUS:85041922537
VL - 56
SP - 5025
EP - 5044
JO - International Journal of Production Research
JF - International Journal of Production Research
SN - 0020-7543
IS - 15
ER -