Implementing coordination contracts in a manufacturer Stackelberg dual-channel supply chain

We examine a manufacturer's pricing strategies in a dual-channel supply chain, in which the manufacturer is a Stackelberg leader and the retailer is a follower. We show the conditions under which the manufacturer and the retailer both prefer a dual-channel supply chain. We examine the coordination schemes for a dual-channel supply chain and find that a manufacturer's contract with a wholesale price and a price for the direct channel can coordinate the dual-channel supply channel, benefiting the retailer but not the manufacturer. We illustrate how such a contract with a complementary agreement, such as a two-part tariff or a profit-sharing agreement, can coordinate the dual-channel supply chain and enable both the manufacturer and the retailer to be a win-win.     

Coordinating contracts for a financially constrained supply chain

We consider a financially constrained supply chain in which a supplier (leader) sells products to a retailer (follower) who has no access to bank financing due to her low credit rating. However, the supplier can borrow from a bank and offer trade credit to the retailer to alleviate her financial constraint. Failure to pay off a bank loan or trade credit incurs a variable default cost. We analyze the centralized version of the supply chain to obtain new coordination requirements. We then examine whether revenue-sharing, buyback, and all-unit quantity discount contracts can coordinate our supply chain. We show that the all-unit quantity discount contract fails to coordinate. However, the revenue-sharing and buyback contracts can coordinate the supply chain, but only when the supply chain has a sufficient total working capital. Moreover, they cannot allocate profit flexibly unless the supplier has a large enough working capital. Finally, we design a generalized revenue-sharing contract that coordinates the supply chain with flexible profit allocation, and also show by numerical examples its superiority over the revenue-sharing and buyback contracts.     

A delay-in-payment contract for Pareto improvement of a supply chain with stochastic demand

We consider a supply chain consisting of a single supplier and a single retailer with stochastic customer demand, which is operated over an infinite horizon. We propose a delay-in-payment contract to coordinate the supply chain. With this contract, the supplier allows the retailer to pay partial order cost at the ordering epoch, and to pay the remaining portion after a permissible number of periods. The system is formulated as a stochastic dynamic programming problem. It is shown that there exists a base-stock policy to be optimal. Compared with the traditional wholesale-price contract, the delay-in-payment contract with appropriate parameters can achieve a Pareto improvement (i.e., the performances of both the supplier and the retailer using the delay-in-payment contract are better than those using the wholesale-price contract). Numerical studies are performed to investigate both the effectiveness of the Pareto improvement, and the impact of the major parameters of the delay-in-payment contract on the system performance.     

低碳努力下资金约束供应链的融资选择策略研究

本文研究低碳环境下资金约束制造商的供应链中成员决策策略及融资模式选择问题,建立了由供应商主导,制造商跟随的Stacklberg模型。考虑市场需求受制造商低碳努力的影响,并设计银行信贷和贸易信贷两种融资方式,从供应链中成员各自利益最大化和低碳努力水平最大化出发,给出了两种融资模式下的均衡解并进行了模式比较分析。研究表明当制造商的低碳投资成本系数和供应商的生产成本均较低时,制造商应选择BCF模式融资,当低碳投资成本系数较低,而生产成本较高时,TCF模式是制造商的融资均衡策略。当低碳投资成本系数较高时,无论生产成本如何变化,此时BCF模式始终是制造商的最佳融资策略。同时存在供应商生产成本的阈值,使得当生产成本低于该阈值时,BCF模式对供应商更佳,其他情况下TCF模式是供应商的融资策略均衡。     

Price competition,cost and demand disruptions and coordination of a supply chain with one manufacturer and two competing retailers

This paper studies the coordination of a supply chain with one manufacturer and two competing retailers after the production cost of the manufacturer was disrupted. We consider two coordination mechanisms: an all-unit quantity discount and an incremental quantity discount. For each mechanism, we develop the conditions under which the supply chain is coordinated and discuss how the cost disruption may affect the coordination mechanisms. For the all-unit quantity discount scheme, we find that the manufacturer charges the lower-cost retailer for a lower unit wholesale price in order to induce him to order more products. If the costs of two retailers have a remarkable difference, then the all-unit quantity discount scheme cannot coordinate the supply chain with disruptions. While the cost disruption may affect the wholesale prices, order quantities as well as retail prices, it is optimal for the supply chain to keep the original coordination mechanism if the production cost change is sufficiently small. The model is also extended to the case with both cost and demand disruptions. The equilibrium strategies of the retailers are investigated when the manufacturer cannot timely react to the disruptions such that she has to keep the original mechanism. We illustrate the results by numerical examples.     

Coordinating a three level supply chain with flexible return policies

This paper studies the coordination issue of a three level supply chain selling short life cycle products in a single period model. The manufacturer first negotiates the trade contract with the retailer, then with the supplier. We construct the so-called flexible return policy by setting the rules of pricing while postponing the determination of the final contract prices. With return policies between each pair of adjacent firms, unsold products or used modules dissembled from the unsold products are returned level by level from the retailer to the upstream firms and each firm shares in the loss due to the overstock. We show that the three level supply chain can be fully coordinated with appropriate contracts and the total profit of the channel can be allocated with any specified ratios among the firms.     

A delayed demand supply chain: Incentives for upstream players

We study a decentralized supply chain where only delayed market demand information is available for making replenishment decisions. The impact of this delay is quantified in a serially linked two-level supply chain where each player exploits the order-up-to replenishment policy. The market demand is assumed to be a first-order autoregressive process. It is shown that the first level of the supply chain benefits from shorter time delays; however, the benefit for the second level is quite minor at best and can sometimes even be (counter-intuitively) detrimental. We conclude that the second level does not have a strong incentive to reduce the time delays in the shared market demand information.     

A systematic approach for supply chain conflict detection with a hierarchical Petri Net extension

Coordinating and managing distributed entities in a supply chain is a challenging task due, in part, to conflicts present in such systems. If not handled effectively, the conflict can degrade the performance of the system as a whole due to the fact that each individual entity may be working towards goals that sub-optimize the integrated system. Therefore, the ability to discover conflicts would be a valuable asset, particularly if the discovery occurred proactively. This paper presents a methodology, extending the concept of basic Petri Nets, to discover supply chain conflict before they occur and cause detrimental effects to system performance. The approach involves linking hierarchical levels of the supply chain system and detecting conflicts occurring when the single entities, each optimized for it own operations, are combined together in a supply chain. These conflicts are not obvious or intuitive in examining the single entities of the supply chain, but when integrated the conflicts are discovered by the methodology. We applied the proposed methodology on a real-world supply chain to illustrate the validity of the tool. Although, further research is needed to fully explore this method of conflict detection, we believe that this research does indeed provide some much needed insight into the daunting task of conflict discovery and therefore proactive handling of these potentially negative occurrences in the supply chain.     

Development and validation of a lean supply chain management measurement instrument

It is widely argued that to be competitive, a company not only needs to focus on internal aspects but on the entire supply chain. Lean supply chain management has become a means of enhancing competitiveness by improving efficiency and increasing flexibility at all stages of the supply chain. This research develops and validates a lean supply chain management measurement instrument. A two-phase approach is used for scale development and refinement. In the first phase, a literature review is conducted to identify definitions of lean supply chain management and agile supply chain management and their corresponding measurement items. In the second phase, the lean supply chain management measurement instrument is validated using survey data based on scales developed in the first phase by 59 scholars with experience in lean management and/or supply chain management. The results provide a structured and comprehensive measure of lean supply chain management indicating that there are two differentiated dimensions in the measurement instrument: one related to the operational aspects of lean supply chain strategy implementation and the second related to lean supply chain planning.     

Optimal design of supply chain networks under uncertain transient demand variations

We consider a detailed mathematical formulation for the problem of designing supply chain networks comprising multiproduct production facilities with shared production resources, warehouses, distribution centers and customer zones and operating under time varying demand uncertainty. Uncertainty is captured in terms of a number of likely scenarios possible to materialize during the lifetime of the network. The problem is formulated as a mixed-integer linear programming problem and solved to global optimality using standard branch-and-bound techniques. A case study concerned with the establishment of Europe-wide supply chain is used to illustrate the applicability and efficiency of the proposed approach. The results obtained provide a good indication of the value of having a model that takes into account the complex interactions that exist in such networks and the effect of inventory levels to the design and operation.     

An interdependent layered network model for a resilient supply chain

This paper addresses the problem of designing supply chains that are resilient to natural or human-induced extreme events. It focuses on the development of efficient restoration strategies that aid the supply chain in recovering from a disruption, thereby limiting the impact on its customers. The proposed restoration model takes into account possible disruptions to infrastructures, e.g., transportation and communications, by explicitly formulating their logical relationships with supply chains. A problem solving process is proposed that provides for cooperation between the managers of the infrastructures and the managers of the supply chains disrupted by an extreme event. Both the model and the problem solving process are exercised with a realistic industry problem.     

Fresh-product supply chain management with logistics outsourcing

We consider a supply chain in which a producer supplies a fresh product, through a third-party logistics (3PL) provider, to a distant market where a distributor purchases and sells it to end customers. The product is perishable, both the quantity and quality of which may deteriorate during the process of transportation. The market demand is random, sensitive to the selling price as well as the freshness of the product. We derive the optimal decisions for the three supply chain members, including the 3PL provider's transportation fee, the producer's shipping quantity and wholesale price, and the distributor's purchasing quantity and retail price. We find that the presence of the 3PL provider in the supply chain has a significant impact on its performance. We propose an incentive scheme to coordinate the supply chain. The scheme consists of two contracts, including a wholesale-market clearance (WMC) contract between the producer and the distributor, and a wholesale-price-discount sharing (WDS) contract between the producer and the 3PL provider. We show that the proposed contracts can eliminate the two sources of “double marginalization” that exist in the three-tier supply chain, and induce the three parties to act in a coordinated way.     

Eco-efficient supply chain networks: development of a design framework and application to a real case study

This paper presents a supply chain network design framework that is based on multi-objective mathematical programming and that can identify ‘eco-efficient’ configuration alternatives that are both efficient and ecologically sound. This work is original in that it encompasses the environmental impact of both transportation and warehousing activities. We apply the proposed framework to a real-life case study (i.e. Lindt & Sprüngli) for the distribution of chocolate products. The results show that cost-driven network optimisation may lead to beneficial effects for the environment and that a minor increase in distribution costs can be offset by a major improvement in environmental performance. This paper contributes to the body of knowledge on eco-efficient supply chain design and closes the missing link between model-based methods and empirical applied research. It also generates insights into the growing debate on the trade-off between the economic and environmental performance of supply chains, supporting organisations in the eco-efficient configuration of their supply chains.     

Information sharing in a supply chain with a make-to-stock manufacturer

We study ex ante information sharing in a supply chain consisting of a downstream retailer and a make-to-stock upstream manufacturer. The retailer has imperfect demand information and may choose to share it with the manufacturer. Based on the information sharing arrangement, the manufacturer makes the wholesale price and the stocking level decisions. Then the retailer decides the order quantity and the manufacturer fulfills the order up to the available stock level. We find that the retailer has an incentive to voluntarily share the information with the make-to-stock manufacturer if the magnitude of demand uncertainty is intermediate. This stands in sharp contrast with the existing studies which show that the retailer never shares information when the manufacturer is make-to-order. Our results highlight the interdependence between the retailer׳s incentive to share information and the manufacturer׳s operational and marketing decisions.     

Single or dual sourcing: decision-making in the presence of supply chain disruption risks

The focus of this paper is placed on evaluating the impacts of supply disruption risks on the choice between the famous single and dual sourcing methods in a two-stage supply chain with a non-stationary and price-sensitive demand. The expected profit functions of the two sourcing modes in the presence of supply chain disruption risks are first obtained, and then compared so that the critical values of the key factors affecting the final choice are identified. Finally, the sensitivity of the buyer's expected profit to various input factors is examined through numerical examples, which provide guidelines for how to use each sourcing method.     

Sustainable supply chain network design: An optimization-oriented review

Supply chain network design (SCND) models and methods have been the subject of several recent literature review surveys, but none of them explicitly includes sustainable development as a main characteristic of the problem considered. The aim of this review is to bridge this gap. The paper analyzes 87 papers in the field of supply chain network design, covering mathematical models that include economic factors as well as environmental and/or social dimensions. The review is organized along four research questions asking (i) which environmental and social objectives are included, (ii) how are they integrated into the models, (iii) which methods and tool are used and finally (iv) which industrial applications and contexts are covered in these models. The review finds that there are a number of limitations to the current research in sustainable SCND. The narrow scope of environmental and social measures in current models should go beyond limited greenhouse gas indicators to broader life-cycle approaches including new social metrics. The more effective inclusion of uncertainty and risk in models with improved multi-objective approaches is also needed. There are also significant gaps in the sectors used to test models limiting more general applicability. The paper concludes with promising new avenues of research to more effectively include sustainability into SCND models.     

Potentially self-defeating: Group buying in a two-tier supply chain

Retailers have an incentive to cooperate in the form of group buying (GB) when a supplier provides quantity discounts, because wholesale price under GB depends on total purchasing quantity rather than individual purchasing (IP) quantity. Most previous studies on GB focus on the benefits that buyers get but ignore the supplier׳s response to GB. In this paper, we take the supplier׳s response into consideration, and present a game model with a single supplier and two symmetric competing retailers in two systems: the retailers purchase individually, and the retailers group buy. Under a general quantity discount schedule, each system has a unique sub-game perfect equilibrium. The comparison between IP and GB suggests that GB may sabotage the benefits of all members in the supply chain (i.e., the supplier, the retailers, and the consumer). Retailers may hold contradictory attitudes toward GB before and after the publishing of the discount schedule. These insights are shown to be robust for the case when more than two retailers are involved, as well as the case when the supplier enjoys economies of scale based on the order volume. We suggest that a mixed discount schedule may help prevent the potential damage of GB. In addition, with significant economies of scale, the supplier and retailers may be better off under GB. Then GB can be a favorable purchasing strategy.     

The impact of timely information on organisational performance in a supply chain

Information produced by ERP systems is termed JIT-information, since it is provided at the right time in the right place with a minimum of waste. The JIT-information construct is defined and described and a measurement scale is developed. A JIT-information performance model is proposed and assessed using a structural equation modelling methodology. The results indicate that the model fits the data well: (1) supply chain management strategy positively impacts JIT-information, (2) JIT-information directly impacts both logistics and organisational performance, and (3) logistics performance directly impacts organisational performance.     

顾客需求驱动的供应链契约问题综述

供应链契约是实现供应链协调和利润分配的基本形式.把来自下游企业的需求分为确定性需求(由给定结构的确定函数描述的需求)和不确定性需求(由随机函数描述的需求)两种模式,界定了供应链管理中需求驱动的契约问题,分别综述了在单方决策和联合决策环境下供应链契约理论、方法的进展,最后提出了供应链契约在未来的研究方向.     

A note on the random yield from the perspective of the supply chain

Keren [The single-period inventory problem: extension to random yield from the perspective of the supply chain. Omega 2009;37:801-10] considers a supply chain in which the distributor faces a known demand and orders from the producer subject to a random production yield, and shows that the distributor may find it optimal to order more than what is needed due to supply uncertainty under a uniform distribution. However, Keren (2009) does not address the questions whether it is always optimal for the distributor to order more, or when to order more. In this note, we point out that ordering more is not always an optimal strategy and specify the condition under which this strategy becomes optimal. We also examine the profit losses of the supply chain members resulting from the random yield supply, which is another question not considered in Keren (2009). The producer is found to possibly benefit from this production yield uncertainty, although the performances of the distributor and of the entire supply chain are always undermined. Our results are obtained under a more generalized yield distribution, and can thus be applied to wider industrial domains.