Transfer pricing is the setting of the price for goods or services sold among related members within an organization, which is an important financial and business issue that has been ignored in many supply chain network designs studies. Some studies have considering transfer pricing into production and supply chain planning; however, total profit optimization is a single-objective and does not consider the satisfaction of individual member from a fair perspective. Since the sustainable development is also very important for long-term strategy in an organization, this study focused on balancing the trade-off of fairness and total profit on supply chain network design problem using transfer pricing. Meantime, a multi-supplier, multi-parts factory, multi-assy factory, multi-sales distributor, multi-item problem is solved by the integrated method of Mixed Integer Linear Programming and Fuzzy-Programming proposed by this study. From the experimental results, we verify that the transfer pricing can maximize the total profit of supply chain network. In addition, the proposed multi-objective optimization model that takes fairness into consideration can benefit each member with minimal satisfaction while nice total profit.

@inproceedings{oscm-2020-1795,
  title={A STUDY ON TRANSFER PRICING CONSIDERING FAIRNESS AND PROFITABILITY},
  year={2020},
  author={Qian Huang and Shunichi Ohmori},
  booktitle={Proceedings of the 10th International Conference on Operations and Supply Chain Management, 2020},
  doi={10.31387/oscm490263}
}

Qian Huang, Shunichi Ohmori (2020). A STUDY ON TRANSFER PRICING CONSIDERING FAIRNESS AND PROFITABILITY. In Proceedings of the 10th International Conference on Operations and Supply Chain Management, 2020. https://doi.org/10.31387/oscm490263