Optimal Control Policies for a Supply Chain with Perishable Products

In this paper we study the manufacturer's optimal control policy on wholesale price and retailer's optimal control policies on both inventory and price in a supply chain of perishable goods, in which deterioration begins at a random point in time. Our research is completed under the assumption that the retail price can be adjusted once at that point in time by considering the lifetime of goods in the cycle and current stock level. The numerical example illustrates that the channel coordination of supply chain can be obtained by manufacturer's offering a reasonable wholesale price and return price when manufacturer offers retailer full credit for all unsold goods.