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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/4092

Title: Using Revenue Sharing to Achieve Supply Chain Coordination for Angel Herbal Mixture: A Product of Angel Herbal Industry
Authors: Kwadzokpo, Harry Makafui
Issue Date: 20-Jun-2011
Abstract: Fierce competitions in today’s global markets and the heightened expectations of consumers have forced business enterprises to invest in and focus attention on, the relationships with their customers and suppliers. While the need for increased efficiency in enterprise operations persists, modern management thinking advocates the collaboration among business partners and the responsiveness to client needs as additional thrusts towards a successful competitive strategy. It is within this context that Supply Chain Management (SCM) has become part of the senior management agenda since the 1990s, particularly in the manufacturing and retailing industries. For the improvement of the supply chain led to channel coordination which aims at improving supply chain performance by aligning the plans and the objectives of individual enterprises. The objective of the thesis is to show conditions under which it is optimal for a vendor to only purchase the item (Angel Herbal Mixture) outright, or only obtain the item on consignment, or both and also show that a consignment scheme can be used to achieve channel coordination and present pricing formulas that a manufacturer can use to “force” the vendor to order, in total and in the best interest of the channel. The supply chain channel coordination was achieved using models developed by developed by Lawrence, J. A. and Pasternack, B. A. (1998) to Angel Herbal Mixture, where we consider a single period inventory (newsboy) problem in which a Angel Herbal Industry will both sell Angel Herbal Mixture to a vendor outright as well as offer the item to a vendor on a revenue sharing (consignment) basis. In the latter case, the amount of money the vendor pays per unit is less than if the item is purchased by the vendor, but the vendor must share some of the revenue with the Angel Herbal Industry. From the application of the model, revenue sharing is an intriguing method for a manufacturer to achieve channel coordination which shows both the retailer and the manufacturer gaining which brings about a win-win situation.
Description: A thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirements for the award of the Degree of Master of Science in Industrial Mathematics, 2011
URI: http://hdl.handle.net/123456789/4092
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