Paper Title
Coordination with Multiple Fare Breaks for Transportation in Two-Echelon Supply Chains
Abstract
This study considers a supply chain in which a supplier delivers one single product to a retailer by carriers with
different capacities to examine the determination of the optimal delivery strategy for coordination, as the retailer’s demand is
either under or over the capacity of the supplier’s carriers. A quantity discount coordination mechanism with a contractual
agreement between the supplier and retailer is used, in which different possible combinations of carriers for delivery are
considered to enhance the profits of both parties. The supplier can increase its profit, by adjusting its discount offer to
encourage the retailer to either increase or decrease the order quantity. The retailer can also benefit by taking the discount
offer to reduce the related costs, and thus enhance profits after coordination.
Keywords - Supply Chain Coordination; Transportation Combination Strategy; Multiple Fare Breaks.