The effect of supply disruption in a two-layer supply chain with one retailer and two suppliers with promotional effort under random demand

Abstract

This paper considers a closed-loop supply chain comprising one retailer and two suppliers. It assumes one supplier as the main supplier and another as the backup. The coordination issue of the supply chain has been discussed in this work. The main supplier's yield is considered subject to disruption. The demand considered here is stochastic. We aim to calculate the supplier's optimum production quantity. Similarly, the retailer's optimal ordering quantity is found out. Additionally, in the centralized supply chain model, we want to maximize the expected profit under certain restriction. Numerical illustrations are discussed to the benefit some characteristic insights over the supply chain model.