Buyer-vendor coordination through quantity discount policy under asymmetric cost information

Coordination between the buyer and the seller is one of the important issues in supply chain management. This paper investigates the coordination problem in a two-stage supply chain under uncertain cost information of the buyer (retailer). The aim of the paper is to design a coordination mechanism through quantity discount policy under asymmetric cost information that allows the system to perform as closely as that of under complete information. Fuzzy set theory is applied to estimate the uncertainty associated with the input cost parameters and triangular membership function has been used to analyze the model. Finally, the model is illustrated with a suitable numerical example.