|Title||The DVD Supply Chain Problem|
|DateSubmitted||31 Mar 2008|
This problem has been adapted from Supply Chain Network Economics: Dynamics of Prices, Flows and Profits by Anna Nagurney (2006)
DVD players are produced in Asia and bought by DVDs-4-U for sale throughout New Zealand.
The cost of producing DVD players comes from the setup cost and the production cost. To set up the manufacturing process costs $5 per player being produced. To produce players using this manufacturing process costs dollars.
The cost of performing DVDs-4-U's quality assurance test and then shipping the players to New Zealand is given by
for players. The storage of players costs DVDs-4-U . DVDs-4-U estimate it costs customers
dollars in petrol to visit their nearest DVDs-4-U retail store and buy DVD players. This gives a unit transaction cost of dollars per player. Their market research shows that the demand curve for the DVD players is given by
where is the effective price per player for the customers, i.e., retail price + unit transaction cost.
|ComputationalModel||The computational model...|