Coordinating Supply Chain with Demand and Price Factor Disruptions

This paper represents coordination policies for a one-supplier-one-retailer supply chain that experiences demand and price factor disruptions at the same time in the planning horizon. Up to now, in the context of supply chain the disruption management models have only incorporated a single disruption factor. We analyze the disruption management decisions from the supplier´s point of view when demand and price factor disrupt simultaneously. We provide the coordination policies when the supplier and retailer take part in a Stackelberg game and supplier is the leader. The results show that the original production plan of the supplier has some robustness when the two disruptions happen at the same time. But the retail price of the retailer should change with the disruptions. The all-unit quantity discount policy AQDP or the capacitated linear price policy CLPP can be used to coordinate the supply chain in this case but the coordination policies should change with the disruptions too