A two-echelon inventory model for fuzzy demand with mutual beneficial pricing approach in a supply chain

This paper develops a two-echelon inventory model with mutual beneficial pricing strategy with considering fuzzy annual demand; single vendor and multiple buyers in this model. The beneficial pricing strategy can benefit the vendor more than multiple buyers in the integrated system, when price reduction is incorporated to entice the buyers to accept the minimum total cost. Negotiation factors is very important in the in fuzzy model, it can balance the cost saving between the players. A numerical example with sensitivity analysis is provided to demonstrate the theory. Finally, this paper can prove that the price reduction mechanism is a mutual beneficial strategic partnership between the vendor and buyers.