Managing the interaction among production, inventory replenishment, and selling in supply chains

In this thesis we consider several issues arising in the management of supply chains, taking into account the interaction of various key decisions. Both centralized and decentralized systems are considered: for a centralized system, we study the optimal policy for coordinating inventory replenishement and product allocation / substitution, and the optimal policy for coordinating replenishment and pricing of substitution etc; for a decentralized system with one manufacturer and one retailer, we study the interaction in determining the whole sale price and production quan-tity (by the manufacturer) and the replenishment quantity (by the retailer), and in determining the production quantity (by the manufacturer) and the purchasing of replenishment option contract (by the retailer). We focus on exploring various struc-ture properties of the optimal policies, such as monotonicity, threshold / base-stock type properties etc, and of the objective functions, such as concavity / convexity, submodularity / supermodularity etc. The methodologies used are Markov decision programming (MDP) and the theory of Stackelberg game, incorporating with various techniques on concavity, submodu-larity, stochastic comparision, and an extensive usage of numerical study