Model for Supporting the Price and Due Date Negotiation in MTO Supply Chain

In order to solve the problem of supporting negotiation on prices and due dates of multiple orders between a manufacturer and its supplier in a make-to-order supply chain,a new negotiation agenda with two phases is proposed based on the characteristics that the relationship between the partners in the supply chain is both cooperative and competitive.In the cooperative phase a mediator implementing simulated annealing is incorporated to help the manufacturer and the supplier search tentative agreement of due dates which minimizes the total supply chain cost.Then,the manufacturer and the supplier adjust the reservation value and aspiration value of price issue accordingly based on the idea of integrated-utility and the result of the previous phase.They bargain on the price issue using concession based methods in the competitive phase.Simulation results show that,the proposed negotiation agenda and approach can achieve near-optimal social welfare and reach a win-win solution for the negotiation agents.The negotiation agenda can be applied practically to the supply chain coordination and business to business online market.