Supply chain coordination with profit-sharing agreements

Bárbara B. Venegas, José A. Ventura, Lisha Duan, Xin Li, Sang Jin Kweon

Research output: Contribution to conferencePaperpeer-review


The purpose of this research is to develop a two-state supply chain inventory model that simultaneously coordinates supplier selection, inventory replenishment, and pricing decisions. The set of potential suppliers and the buyer represent the stages in this setup. Buyer and suppliers trade a single product that experiences a price-sensitive demand. We consider capacitated suppliers whose performance is bounded by fixed production rates. Within this framework, we obtain the structure of the optimal inventory policies within a mixed integer nonlinear model, proving that the zero-inventory ordering policy is still optimal, and proposing a new generalized nested inventory policy. In addition, we propose a profit sharing contract to tackle the conflicting objectives of the competing firms within an integrated supply chain optimization model.

Original languageEnglish (US)
Number of pages6
StatePublished - 2018
Event2018 Institute of Industrial and Systems Engineers Annual Conference and Expo, IISE 2018 - Orlando, United States
Duration: May 19 2018May 22 2018


Other2018 Institute of Industrial and Systems Engineers Annual Conference and Expo, IISE 2018
Country/TerritoryUnited States

All Science Journal Classification (ASJC) codes

  • Control and Systems Engineering
  • Industrial and Manufacturing Engineering


Dive into the research topics of 'Supply chain coordination with profit-sharing agreements'. Together they form a unique fingerprint.

Cite this