Coordination and Optimization of Distribution System Under Correlated Uncertain Demand

In this paper, the coordination and optimization of a distribution system, consisting of one manufacturer and multiple retailers, is researched. Both the uncertainty and the correlation of the market demand are fully considered, according to the observation and analysis of an actual distribution system. Correlated random number is introduced into Monte Carlo method to simulate the correlated uncertain demand so as to offer the system more real sample data. A simple, effective approach is proposed to solve the model. The coordination mechanism is also given for cooperative pricing. The numerical experiment shows that the wholesale price and order quantities are optimized by our approach. In addition, the important parameters´ influence on the wholesale price is also analyzed in the work.