Integrated Supply Chain Management for Perishable Products: Dynamics and Oligopolistic Competition Perspectives with Application to Pharmaceuticals

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pharmaceutical supply chain, perishable inventory dynamics, oligopolistic competition, variational inequality, interior point methods

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We propose an integrated supply chain management framework that allows us to explicitly consider the impact of product perishability on a broad scale that includes manufacturers, distribution centers, wholesalers, and demand markets. The framework proposed herein also makes it possible to consider the oligopolistic competition across wholesalers that drives price and demand fluctuations. Furthermore, the supply chain decision rules are derived from necessary conditions in the framework. The inclusion of such salient features allows the framework to generate outcomes that suggest realistic managerial insights. We provide a numerical example in which two multi-national pharmaceutical firms producing a homogeneous medicinal drug and four oligopolistic wholesalers are considered.

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International Journal of Production Economics, v. 179, p. 117-129