Presentation of a bi-level model for pricing and order planning in tri-echelon supply chain

A supply chain is a series of units that transforms raw materials into finished products and services and delivers the products to customers. Recently, one of the important subjects that in supply chain systems management has been considered is titled pricing products. The subject of pricing products produced has more importance, when it is considered along with inventories management and control and order planning problems. This paper with considering to this importance, with proposing a method to model and solve pricing and inventories management problem in tri-echelon supply chains of producer, wholesalers and retailers, first, estimates the objective functions of cost in wholesalers’ level and profit in retailers’ level by response surface methodology (RSM) and simulation and then solves the obtained non-linear model based on bi-level programming by genetic algorithm (GA). The performance of the proposed method in solving a case problem, confirms attainment to simultaneous results of optimal sale price and order planning corresponding with historical data.