Research on Pharmaceutical Supply Chain Decision-Making Model Considering Output and Demand Fluctuations

Abstract

In response to the evolving pharmaceutical supply chain market, which is shifting from a seller’s to a buyer’s market, this study introduces an innovative decision-making model that addresses the volatility in output and demand. Our primary innovation lies in the development of a “revenue-sharing plus margin” collaborative decision-making optimization model, designed to enhance supply chain coordination amidst uncertainty. By establishing a revenue function, we propose a coordinated approach that leverages both revenue-sharing coefficients and profit margins to achieve Pareto improvements for supply chain partners. Through numerical analysis, we identify an optimal value range for the model’s parameters, demonstrating the model’s efficacy in balancing the expected returns for both suppliers and retailers. The study’s contributions are threefold: (1) the introduction of a novel decision-making model tailored to the pharmaceutical supply chain, (2) the provision of a clear framework for comparing collaborative versus decentralized decision-making outcomes, and (3) the empirical validation of the model through case studies, showcasing its superiority in overall supply chain efficiency. This research significantly extends the current literature by providing a nuanced understanding of how supply chain coordination can be optimized under conditions of uncertainty. The findings underscore the importance of collaborative decision-making in achieving supply chain stability and offer practical insights for supply chain management in the pharmaceutical industry.

Keywords

• Pharmaceutical supply chain
• supply chain decision-making
• output and demand fluctuations
• revenue sharing
• margins