Supply Chain Coordination with Demand Disruptions under Convex Production Cost Function

This paper investigates the problem of how to handling demand disruptions in a one-supplier-one-retailer supply chain, where production cost is a convex function of production quantity andprice-demand relationship is linear. Our results show that, if demand is disrupted, under the new price-demand relationship, all-unit wholesale quantity discount policies combining capacitated linear pricingpolicies can also fully coordinate the supply chain.