Coordinating supply chain inventories through common replenishment epochs

This paper proposes a model to study and analyze the benefit of coordinating supply chain inventories through the use of common replenishment epochs or time periods. A one-vendor, multi-buyer supply chain for a single product is analyzed. Under the proposed strategy, the vendor specifies common replenishment periods and requires all buyers to replenish only at those time periods. The vendor offers a price discount to entice the buyers to accept this strategy. The optimal replenishment period and the price discount to be offered by the vendor are determined as a solution to a Stackelberg game. After developing a method to solve the game, a numerical study is conducted to evaluate the benefit of the proposed coordinated strategy. (C) 2001 Elsevier Science B.V. All rights reserved.