Coordinated ordering decisions for products with short lifecycle and variable selling price

The supplier-buyer coordination is an important policy in the supply chain management. The buyer in the two-echelon inventory system with regular selling season has to face the uncertainty of customer demand, supplier's delivery time and variable price change. At the same time, the supplier has to consider the inventory holding and delay cost. The objective of this study is to develop an integrated supply chain strategy for products with short lifecycle and variable selling price to entice cooperation. The strategy must provide a win-win situation for both the supplier and the buyer. A numerical case example, sensitivity analysis and compensation mechanism are given to illustrate the model. (C) 2007 Elsevier Ltd. All rights reserved.