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| Author: | Weng, Z.K. |
| Title: | Coordinating order quantities between the manufacturer and the buyer: A generalized newsvendor model |
| Journal: | European Journal of Operational Research
2004 : JUL, VOL. 156:1, p. 148-161 |
| Index terms: | Supply chain management Purchasing |
| Language: | eng |
| Abstract: | A generalized newsvendor model is developed to analyze the coordinated quantity decisions between the manufacturer and the buyer. The manufacturer and the buyer operate to meet random demand of one product with a short lifecycle. The analytical results for the general newsvendor model are obtained. The authors analysis of the generalized newsvendor model developed yields the insights into the coordination structure between the manufacturer and the buyer. Quantity discount policies are developed as incentive policies, which the manufacturer may use to induce the buyer to order the coordinated quantity. The model indicates that the most important effect of coordination is on reducing operating costs. |
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