Abstract
In this research, we study mechanisms to coordinate behavior of firms in order to minimize the total cost of a supply chain. We deal with the Common Replenishment Epochs (CRE) strategy. In a two stage supply chain including a vendor and buyers, the CRE strategy means that if the ordering cycles of the buyers are restricted in a standard ordering cycle proposed by the vendor, the vendor offers sufficient price discount. We improve the CRE strategy to be more realistic by taking inventory holding cost and ordering cost into account. The situations of using the CRE strategy can be modeled as Stackelberg games. Furthermore, we propose to execute multiple CRE strategies in the supply chain and show that the total cost of the supply chain decreases by executing multiple CRE strategies.
