Integrated three layer supply chain inventory model for price sensitive and time dependent demand with suggested retail price by manufacturer

This paper presents an integrated three layer supply chain policy for multi-channel and multi-echelon consisting manufacturer, distributors and retailers as supply chain members. The demand of retailers end is considered as linear function of time and retail price. The average net profit function per unit time is derived for each supply chain member which are based on demand of retailer's end. Since holding cost of goods/inventory is expensive in developed areas, we have introduced a new concept to share holding cost among distributors and retailers. We have optimized lot size, retailing price and replenishment time interval for retailers. We have also optimized initial inventory level and wholesale price for distributors and manufacturer respectively. This study is performed in two different categories one is decentralized and other is centralized scenario. The profit function of each supply chain members has been derived and shown as a concave function with respect to decision variables. More over propositions and results are made to illustrate the proposed model and we have sensitive analyzed it with numerical example.