M. Santos, M. Carvalho, P. Amorim, S. Martins
The Minimum Life On Receipt (MLOR) is a rule in retailer-supplier agreements that impose the maximum age a perishable product can be accepted by the retailer, for a given regular price. In this work we examine the possibility of adding a new clause to the retailer-supplier agreement that establishes the share of orders that should be accepted by the retailer beyond the MLOR at a discount.
We formulate the problem as a bilevel optimization program with the objective of the retailer at the upper level and the objective of the supplier at the lower level.
We first compare our bilevel approach with the traditional single-level collaborative approach and demonstrate its superiority. We then evaluate the benefits of the new clause in the agreement, for a set of scenarios, comparing to the standard agreement, and show that the retailer’s profits can increase on average 4% while the average profits of the supplier can increase up to 13%.
Palabras clave: Minimum Life On Receipt (MLOR), Bilevel optimization, Perishable products, Retail operations
Programado
APDIO-SEIO
11 de junio de 2025 10:30
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