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Fair Transfer Prices of Global Supply Chains in the Process Industry

  • Songsong Liu
  • Roberto Fucarino
  • Lazaros G. Papageorgiou
Conference paper
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 682)

Abstract

This work addresses the optimisation of transfer prices for the fair profit distribution among the members involved in a global supply chain in the process industry. A mixed integer linear programming (MILP) model is developed for production and distribution planning of global supply chains, where the optimal transfer prices of products between plants and markets are determined. Two solution approaches are presented for fair solutions using Nash and lexicographic maximin principles. The applicability of the proposed models and approaches are demonstrated by an illustrative example. The results show that both approaches can fairly distribute the whole supply chain’s profit to the members.

Keywords

Supply Chain Mixed Integer Linear Programming Supply Chain Network Transfer Price Formulation Plant 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgements

Funding from the UK Engineering & Physical Sciences Research Council (EPSRC) for the EPSRC Centre for Innovative Manufacturing in Emergent Macromolecular Therapies hosted by University College London is gratefully acknowledged. Financial support from the consortium of industrial and governmental users is also acknowledged.

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Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  1. 1.Centre for Process Systems Engineering, Department of Chemical EngineeringUCL (University College London)LondonUK
  2. 2.Dipartimento di Ingegneria Chimica, Gestionale, Informatica, MeccanicaUniversità degli Studi di PalermoPalermoItaly

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