The benefits of a three-level coordinated distribution policy in the value chain

Several studies have addressed the “buyer–supplier” relationship both qualitatively and quantitatively. Accordingly, this study focuses specifically on shipment sizes, and the number of shipments made under a three-echelon model composed of a manufacturer, a distribution center, and a retailer. A joint model is proposed, in which the system relevant cost is significantly reduced. Each party’s total relevant cost loss was calculated and compared with its optimal strategy. While the retailer was the focal company, the other parties’ loss tended to be the largest.