Evaluate cost and time in supply chain selection under price-dependent demand for one product family

Supply chain selection and sale price decision problem in one product family can be formulated as a profit-driven optimization problem in which the decision variables are supplier options, retail sale prices, and whole sale prices for all product variants and the object is to maximize the profit of the decision-making leader. Two supply chain options are considered under stochastic and price-dependent demand environment. One option might be domestic based high-cost providers with short procedure-time and another option could be low-cost international suppliers with long procedure time. Results show that appropriate procedure cost reduce could justify a longer procedure time in supply chain selection or vise versa. But the required procedure cost or procedure time reduce rate is affected by the price-demand function and the inventory holding rate. The method proposed provides an integrated approach to evaluate cost and procedure time in the supply chain selection.