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In particular, in the proposed model, the retailer has the authority of deciding on order quantity and selling price but both of these decision variables have a substantial impact on the supplier profitability.
The distributor sets his order quantity and product selling price.
(Q) order quantity.
Order quantity for the buyer.
the retailer's order quantity.
In addition, optimal order quantity is calculated.
Q the order quantity for the retailer.
Q i order quantity for product i.
Retailer's order quantity (decision variable).
The warehouse's order quantity is integer multiples of the retailer's order quantity.
Carrying cost increase with increase in re-order quantity while ordering cost decreases with increase order quantity.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com