Department of Economics and Business Economics

A variable neighborhood search heuristic for supply chain coordination using dynamic price discounts

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This research studies the problem of supply chain coordination using temporary price discounts. The supplier decides how much discount should be introduced in each period to each of the customers, aiming to maximize its profit, while giving the customers the incentive to order in the desired periods. To solve this problem, a variable neighborhood search is introduced. The results of computational experiments indicate that the variable neighborhood search outperforms the mixed integer-based heuristic introduced earlier in the literature for this problem. Our metaheuristic procedure found the optimal solution for small instances in more than 80% of the cases. Moreover, an advantage of this metaheuristic is the significantly shorter computing time that allows applying it to larger instances.

Original languageEnglish
JournalEURO Journal on Transportation and Logistics
Volume7
Issue4
Pages (from-to)363-385
Number of pages23
ISSN2192-4376
DOIs
Publication statusPublished - 2018

    Research areas

  • Discounts, Metaheuristics, Variable neighborhood search, Supply chain coordination, Dynamic lot sizing, JOINT REPLENISHMENT PROBLEM, LOT-SIZING PROBLEM, QUANTITY DISCOUNTS, MODEL

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