Coordinating a supply chain for deteriorating items with a revenue sharing and cooperative investment contract

In this study, a one-manufacturer–one-retailer supply chain model for deteriorating items with controllable deterioration rate and price-dependent demand is developed, in which both players cooperatively invest in preservation technology to reduce deterioration. Algorithms are designed to obtain the pricing and preservation technology investment strategies in both integrated and decentralized scenarios. It is shown that cooperative investment strategy benefits the manufacturer but damages the profits of the retailer and the whole supply chain. A revenue sharing and cooperative investment contract, which combines revenue sharing and cost sharing mechanisms, is thus designed to coordinate the supply chain. Numerical simulations and sensitivity analysis of the equilibrium strategies and coordinating results on key system parameters are given to verify the effectiveness of the contract, and meanwhile get some managerial insights. The results show that only when the revenue sharing rate lies roughly between 1/2 and 3/4 can the contract perfectly coordinate the supply chain in most cases, which has an important guiding significance for the supply chain coordination of deteriorating items when considering preservation technology investment.     

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 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.     

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.     

A decision support system for a third-party coordinator managing supply chain with demand uncertainty

Global supply chains reduce cost but increase lead times, complexities and uncertainties. Retailers in consumer products industry are getting shorter lead time to respond to market demand. To meet this challenge, many rely on third party supply chain managers (SCMs) for economically supplying required quantities of finished products quickly. However, due to shorter ‘time to market’, the SCM has to procure raw materials and start production process based on expected demand. Since SCM absorbs financial penalties associated with under- and over-estimation of demand from retailer, finding an optimal production lot size and product customisation strategy are essential to an SCM's operation. We develop a profit maximisation model and provide a close-form solution that allows an SCM to calculate optimal production lot size. The model is used to examine profitability of postponing product customisation. Finally, the effect of demand variation on SCM's profitability is explored.     

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.     

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.     

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.     

An option contract pricing model of relief material supply chain

Relief material management which aims to reduce the impact of disaster and maintain social stability is of great importance for nonprofit organization (NPO) such as government, department of civil affair or Red Cross. However, the research of efficiency and performance on this field has long been ignored. In order to improve the efficiency and performance of the relief material management, we apply the supply chain management method into this field. Considering the relief material management system as a supply chain with one buyer and one supplier, we introduce the option contract mechanism into relief material supply chain management. With reasonable assumptions, we design an option contract with two delivery steps, and build an option pricing model with binominal lattice to estimate the different values of the same option contract for both members of supply chain. Furthermore, we analyze the impacts of the different parameters (such as the ratio of inventory, subjective probability of disaster, etc.), on the supply chain and its members in detail. The numerical example presented at last demonstrates that, with two delivery steps, there is a feasible price range of option contract which makes both members of relief material supply chain profitable and willing to conduct the transaction with option contract.     

Outsourcing vs. in-house production: a comparison of supply chain contracts with effort dependent demand

We analyze the effort and pricing decisions in a two facility supply chain in which one of the parties can exert costly effort to increase demand. We consider an outsourcing model in which the supplier makes the effort decision and an in-house production model in which the manufacturer decides on the effort level and we compare these two models with each other. We analyze and compare several contracts for decentralized supply chain models and we aim to find which contracts are best to use in different cases. We find the optimal contract parameters in each case and perform extensive computational testing to compare the efficiencies of these contracts. We also analyze the effect of the powers of the parties in the system and the effect of system parameters on the performances of the contracts and on the optimal values of the model variables such as price, effort and demand.     

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.     

Strategic supply network planning with vendor selection under consideration of risk and demand uncertainty

We present a stochastic version of a three-layer supply network planning problem that includes the selection of vendors that must be equipped with company-specific tools. The configuration of a supply network must be determined by using demand forecasts for a long planning horizon to meet a given service level. The risk induced by the uncertain demand is explicitly considered by incorporating the conditional value at risk. The objective is to maximize the weighted sum of the expected net present value of discounted cash flows and the conditional value at risk. This would lead to a non-linear model formulation that is approximated by a mixed-integer linear model. This approximation is realized by a piecewise linearization of the expected backlogs and physical inventory as non-linear functions of cumulative production quantities. A two-stage stochastic programming approach is proposed. Our numerical analysis of generic test instances indicates that solving the linearized model formulation yields a robust and stable supply network configuration when demand is uncertain.     

基于货架空间成本共担的不同权力供应链均衡分析

针对产品需求受货架空间与零售价格共同影响的两级供应链,通过比较供应商主导、零售商主导和权力均等三种不同权力结构供应链均衡结果,分析了供应商与零售商共同承担货架空间成本对供应链定价、货架空间分配和利润的影响。研究结果表明:供应商与零售商共同承担货架空间成本会减少供应商主导供应链的整体利润,但会使零售商主导和权力均等供应链通过分配更多的货架空间增加产品销量,在一定范围内使得供应链整体利润得到提高。由于三种不同权力结构供应链均未达到整体最优,提出了基于货架成本共担的收入共享合同,并给出了供应商和零售商均能接受的分配方案。     

基于期望准则和分布自由的回购契约协调模型

将供应链管理引入需求分布自由的市场环境中,以回购契约作为管理的激励机制,研究均为风险中性的供应商—零售商构成的供应链系统的最优订购—定价决策以及回购契约的协调性问题.研究需求分布自由环境下供应链系统的协调性具有重要意义,尤其是对缺乏充分历史销售数据的新产品,短生命周期产品而言.基于期望收益准则和需求分布自由,分别建立供应链系统、零售商和供应商的上界、下界和最小期望收益模型,并在不同的需求依赖价格模式(加型模式和乘型模式)下,分析供应链的最优订购—定价决策以及回购契约的协调性.研究发现,供应链系统的期望收益在由上界向下界乃至退化为最小期望收益时,回购契约的协调能力逐渐增强.即,在上界期望收益模型中,回购契约无法协调供应链系统;在下界期望收益模型中,存在唯一的一组回购契约参数协调供应链系统;在最小期望收益模型中,回购参数是批发价格的反应函数,回购契约可以灵活地协调供应链系统.     

Supply chain contract evolution

This paper draws together theories from organisational and neo-institutional literatures to address the evolution of supply chain contracts. Using a longitudinal case study of the Norwegian State Railways, we examine how firms move through the stages in an inter-organisational process of supply chain contract evolution and how they can cooperate to ensure efficiency and equity in their contractual relationship. The findings suggest that inefficient and inequitable initial contracts can occur, in part, because of the cognitive shortcomings in human decision-making processes that reveal themselves early in the arrangement before learning and trust building can accumulate. We then reveal how parties can renegotiate towards a more equitable and efficient supply chain contract.     

单周期产品需求不确定性对供应链合作的影响

合作是提高供应链竞争力的途径,也是增强供应链企业抵御经营风险的重要手段. 研究 了由一个生产商和一个零售商组成的两层供应链,用变异系数(需求的均方差与其均值之比) 描述单周期产品市场需求的不确定性. 研究发现在一定的市场需求不确定性条件下,生产商与 零售商才存在合作博弈均衡;通过市场需求不确定性的变化对合作均衡与合作效果影响的数 值分析,及其与非合作情形的对比,结果说明在给定的零售价格水平下,合作具有改善供应链 企业应对市场需求不确定性变化和规避经营风险的能力.     

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.     

考虑异质消费者的线下到线上供应链合作广告契约设计

本文针对一个拥有线上渠道的制造商和一个零售商组成的线下到线上(O2O)供应链,考虑渠道产品差异化策略下零售商为制造商线上渠道进行广告引流,刻画消费者对产品的异质性需求,分别设计对称信息和不对称信息下制造商的最优合作广告契约,通过对比两种情形中最优决策及利润的变化分析信息不对称的影响,并进一步探讨不对称信息下消费者渠道转换的麻烦成本、单位不匹配成本等重要参数对合作广告契约设计和供应链成员利润的影响。研究发现:不对称信息下,制造商可以策略性选择三种不同策略以最大化自身利润,其中不甄别零售商真实信息的混同均衡在某些条件下是制造商的最优策略;尽管信息不对称会给制造商带来利润损失,但制造商通过策略选择可缓和信息不对称的不利影响,某些条件下信息不对称并不损害供应链总体的利润;麻烦成本的变化会改变制造商不对称信息下最优合作广告契约的策略选择,某些条件下麻烦成本的增高对制造商利润反而存在正影响。最后,通过数值仿真对上述研究结果进行直观考察和说明。     

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.     

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.