A cooperative advertising collaboration policy in supply chain management under uncertain conditions

• Published in: Applied soft computing Vol. 88; p. 105948
• Main Authors: Sarkar, Biswajit, Omair, Muhammad, Kim, Namhun
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.03.2020
• Subjects: Advertisement cost; Collaboration policy; Fuzzy costs; Supply chain management; Three-echelon supply chain; Supply chain management; Fuzzy costs; Three-echelon supply chain; Advertisement cost; Collaboration policy
• ISSN: 1568-4946; 1872-9681
• DOI: 10.1016/j.asoc.2019.105948

Many industries are facing big challenges to design supply chains in a way to maximize the profit and meet the heightened expectations of the customer. This new era entirely relies on the dynamic advantages of competition and the role played by the collaboration policy. A global economy and increasing demand have put a huge pressure on supply chain partners to build a collaboration policy based on price, order quantity, and advertising. Companies are adopting the idea of ”shaking hands” to obtain more profit instead of taking risks through competition. Cooperative (co-op) advertising is a significant policy of centralized supply chain management (SCM) to boost the revenues generated by the supplier, manufacturer, and retailers. The uncertain costs associated with the supply chain management also create obstacles in economic analysis and feasibility. These uncertainties are associated with the basic costs of all supply chain partners, which are represented using a signed distance formula. This paper develops the concept of co-op advertising among the supplier, manufacturer, and retailers with a variable demand driven by selling price and advertising costs, where all basic costs are considered as fuzzy. The profit is optimized by considering variable cycle time, shipments, pricing and advertising costs for the decision support system of the supply chain management. The optimal results of the co-op advertisement ensured an increase in the revenue of whole supply chain. [Display omitted] •Cooperative advertising policy is developed among supply chain players.•Demand is considered as a function of selling price and advertising cost.•A supply chain model is developed to overcome the uncertainties in basic costs.•Sequential quadratic programming is employed to find the optimal solution.•Collaboration among supply chain players increases the total profit of supply chain.