This study contributes to the periodic review inventory system literature by: (1) investigating customer service level (CSL) as a social responsibility in pharmaceutical supply chains (PSCs) and (2) proposing supply chain contracting to achieve win–win coordination and guarantee a satisfied CSL. Specifically, considering the demand uncertainty as one of the main challenges faced by pharmacies, we analyze how applying contracts to coordinate the inventory policy of a pharmacy with that of its supplier can affect their profits and the CSL offered to society. Having shown the advantages of the centralization compared to the decentralization, we design a coordination scheme based on the quantity discount contract to encourage the players move towards centralization. Under the proposed scheme, we first obtain the minimum and maximum acceptable amounts of discount from each actor’s viewpoint. Then, we propose a benefit-sharing strategy in order to make the plan interesting to both sides. The proposed discount contract and benefit-sharing strategy distribute the extra profits equitably between the two participants according to their bargaining power, which can make a win–win condition for two actors. Our results suggest that coordinating review period and order-up-to-level of the retailer and replenishment multiplier of the supplier will be of benefit in terms of both economic profitability and social responsibility.
Keywords: Supply chain coordination, quantity discount contract, customer service level, periodic review inventory policy, benefit-sharing strategy
@article{RO_2021__55_2_1077_0,
author = {Johari, Maryam and Hosseini-Motlagh, Seyyed-Mahdi and Nematollahi, Mohammadreza and Goh, Mark and Ignatius, Joshua},
title = {Socially concerned periodic review replenishment system with customer service level and supply chain contracting},
journal = {RAIRO. Operations Research},
pages = {1077--1111},
year = {2021},
publisher = {EDP-Sciences},
volume = {55},
number = {2},
doi = {10.1051/ro/2021040},
mrnumber = {4254328},
language = {en},
url = {https://www.numdam.org/articles/10.1051/ro/2021040/}
}
TY - JOUR AU - Johari, Maryam AU - Hosseini-Motlagh, Seyyed-Mahdi AU - Nematollahi, Mohammadreza AU - Goh, Mark AU - Ignatius, Joshua TI - Socially concerned periodic review replenishment system with customer service level and supply chain contracting JO - RAIRO. Operations Research PY - 2021 SP - 1077 EP - 1111 VL - 55 IS - 2 PB - EDP-Sciences UR - https://www.numdam.org/articles/10.1051/ro/2021040/ DO - 10.1051/ro/2021040 LA - en ID - RO_2021__55_2_1077_0 ER -
%0 Journal Article %A Johari, Maryam %A Hosseini-Motlagh, Seyyed-Mahdi %A Nematollahi, Mohammadreza %A Goh, Mark %A Ignatius, Joshua %T Socially concerned periodic review replenishment system with customer service level and supply chain contracting %J RAIRO. Operations Research %D 2021 %P 1077-1111 %V 55 %N 2 %I EDP-Sciences %U https://www.numdam.org/articles/10.1051/ro/2021040/ %R 10.1051/ro/2021040 %G en %F RO_2021__55_2_1077_0
Johari, Maryam; Hosseini-Motlagh, Seyyed-Mahdi; Nematollahi, Mohammadreza; Goh, Mark; Ignatius, Joshua. Socially concerned periodic review replenishment system with customer service level and supply chain contracting. RAIRO. Operations Research, Tome 55 (2021) no. 2, pp. 1077-1111. doi: 10.1051/ro/2021040
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