The effect of full or partial pricing integration on supply chain management

2019 ◽  
Vol 53 (5) ◽  
pp. 1807-1817
Author(s):  
Neng-Hui Shih ◽  
Ming-Hung Shu ◽  
Chih-Hsiung Wang
Keyword(s):  
Supply Chain ◽  
Cost Model ◽  
Service Level ◽  
Chain Model ◽  
Control Cost ◽  
Integration Model ◽  
Optimal Service ◽  
Supply Chain Model ◽  
Optimal Pricing Strategy ◽  
Total Profit

A previous paper proposed a supply chain model, comprised of a retailer and manufacturer, in which the manufacturer uses product pricing to maximize the profit of the entire supply chain. The increased profits gained from integration are then shared among all the supply chain members. The optimal pricing strategy was shown to be “products on consignment” for sale. The present study extends this simple two-layer supply chain model to a more complicated three-layer model, in which the supply chain comprises not only the retailer and manufacturer, but also an intermediate distributor. In contrast to the previous model, the present model not only considers the role of the distributor, but also the effects of product nonconformance at each facility in the supply chain. The profit function of each facility in the supply chain is established, including the sales revenue, procurement cost, and quality control cost. The investment cost at the retailer to improve the service level is also considered. It is shown that the total profit of the supply chain is maximized when the retailer’s optimal service level is adopted, where this service level is adjusted in accordance with the distributor’s unit sale price. Furthermore, after price integration, the overall profit of the supply chain is found to equal the retailer’s profit. In other words, the total profit of the manufacturer and distributor is equal to zero. Numerical examples are given to illustrate the proposed pricing integration model under different quality environments. The results are contrasted with those obtained using a traditional pricing model, namely the “make up on cost’’ model. Overall, the present results show that the manufacturer is always the winner under partial price integration (i.e., only the retailer and distributor join the integration). Furthermore, partial integration is far less profitable for the retailer and distributor than full integration.

scholarly journals A supply chain model with service level constraints and strategies under uncertainty

2021 ◽  
Vol 60 (6) ◽  
pp. 6035-6052
Author(s):  
Shaktipada Bhuniya ◽  
Sarla Pareek ◽  
Biswajit Sarkar
Keyword(s):  
Supply Chain ◽  
Service Level ◽  
Chain Model ◽  
Supply Chain Model

Research and Simulation of Supply Chain Disruption Based on Contract

2013 ◽  
Vol 380-384 ◽  
pp. 4815-4822 ◽  
Author(s):  
Qi Lian ◽  
Su Ling Jia
Keyword(s):  
Supply Chain ◽  
Negative Influence ◽  
Chain Model ◽  
Market Demand ◽  
Supply Chain Model ◽  
Hysteretic Effect ◽  
Total Profit ◽  
Total Inventory ◽  
Descriptive Statistical Analysis

In order to research the long-term disruption influence on supply chain and the performance that contracts exert on supply chain when disruption happens, this paper constructs a VMI three-echelon supply chain model based on system dynamics. Through dynamic simulation of the model, the total inventory, total profit and market demand shortage data are respectively collected under conditions of no disruption, manufacture disruption and transport disruption. By descriptive statistical analysis of these data, we find the disruption has secular and hysteretic effect on the supply chain. Furthermore, T test is used to testify the contracts effectiveness on the supply chain under disruption conditions. These analytical results show that quantity discount contract and revenue sharing contract can effectively relieve the negative influence on the supply chain when disruptions happen, since they not only enhance the total profit but also stabilize the fluctuation of the supply chains total inventory, whereas the contracts do not perform well in satisfying the market demand shortage.

A Coordinated Supply Chain Model for Imperfect Items under Power Function Lead Time Crashing Cost and Investment with a Service Level Constraint

2016 ◽  
Vol 9 (3) ◽  
pp. 65-82 ◽  
Author(s):  
Nughthoh Arfawi Kurdhi ◽  
Livvia Paradisea Santoso ◽  
Sri Sulistijowati Handajani ◽  
Titin Sri Martini
Keyword(s):  
Supply Chain ◽  
Power Function ◽  
Cost Reduction ◽  
Lead Time ◽  
Service Level ◽  
Chain Model ◽  
Imperfect Quality ◽  
Supply Chain Model ◽  
Ordering Cost Reduction ◽  
Crashing Cost

This paper presents a coordinated vendor-buyer supply chain model in two stages with imperfect quality items, lead time and ordering cost reduction, and service level constraint. It is assumed that each arrival lot received by the buyer contains a percentage of imperfect quality items which follows a uniform distribution. A 100% screening process for detecting the defective items is conducted. Lead time crashing cost and investment for ordering cost reduction follow power function distribution. The shortage during the lead time is permitted and backordered partially for the buyer. However, the level of shortage is limited by service level constraint policy. The optimal order quantity, reorder point, lead time, ordering cost, and the number of delivery are determined by the Lagrange method such that joint total cost of the system is minimized and the service level constraint is satisfied. An iterative procedure is developed to determine the optimal solution and a numerical example is presented to illustrate the result of the proposed model.

scholarly journals Two-Echelon Supply Chain Model with Demand Dependent On Price, Promotional Effort and Service Level in Crisp and Fuzzy Environments

2020 ◽  
pp. 317-329
Author(s):  
Sahidul Islam ◽  
Sayan Chandra Deb
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Fuzzy Model ◽  
Optimal Strategies ◽  
Service Level ◽  
Chain Model ◽  
Selling Price ◽  
Promotional Effort ◽  
Supply Chain Model ◽  
Cost Parameters

This article explores a supply chain model consisting of a single manufacturer and two competing retailers. The manufacturer, as a Stackelberg leader specifies a wholesale price and bears servicing costs of the products. Then, both the retailers advertise the products and sell them to the customers. So, the demand of the products is influenced by selling price, service level and also promotional effort. On the basis of this gaming structure, two mathematical models have been formed - crisp model, where each member of the chain exactly knows all the cost parameters and fuzzy model where those cost parameters are considered as fuzzy numbers. Optimal strategies for the manufacturer and the retailers are determined and some numerical examples have been given. Finally, how perturbations of parameters affect the profits of the chain members have been determined.

The Research of United Scheduling and Coordination in Three-Layer Supply Chain Model

2011 ◽  
Vol 341-342 ◽  
pp. 369-373
Author(s):  
He Ping Zhang
Keyword(s):  
Supply Chain ◽  
Global Economy ◽  
Rapid Development ◽  
Dynamic Programming Algorithm ◽  
Transportation Cost ◽  
Service Level ◽  
Programming Algorithm ◽  
Chain Model ◽  
Supply Chain Model ◽  
Total Transportation Cost

With the rapid development of the global economy, more and more enterprises emphasize on the coordination with the partners to improve the supply chain competitive capability. This paper focuses on the united scheduling of the three-layer supply chain and the coordination mechanisms of agile supply chain. The objective is to minimize the total transportation cost and improve the customer’s service level, which is achieved by scheduling the jobs and delivering them to the next stage in batches. Based on the features of the optimal scheduling, a dynamic programming algorithm is proposed.

Two-echelon imperfect production fuzzy supply chain model for reliability dependent demand with probabilistic deterioration and rework

2021 ◽  
pp. 1-15
Author(s):  
Sudip Adak ◽  
G.S. Mahapatra
Keyword(s):  
Supply Chain ◽  
Production Rate ◽  
Production Cost ◽  
Idle Time ◽  
Chain Model ◽  
Specific Time ◽  
Defective Items ◽  
Imperfect Production ◽  
Supply Chain Model ◽  
Dependent Demand

This paper develops a fuzzy two-layer supply chain for manufacturer and retailer with defective and non-defective types of products. The manufacturer produces up to a specific time, including faulty and non-defective items, and after the screening, the non-defective item sends to the retailer. The retailer’s strategy is to do the screening of items received from the manufacturer; subsequently, the perfect quality items are used to fulfill the customer’s demand, and the defective items are reworked. The retailer considers that customer demand is time and reliability dependent. The supply chain considers probabilistic deterioration for the manufacturer and retailers along with the strategies such as production rate, unit production cost, cost of idle time of manufacturer, screening, rework, etc. The optimum average profit of the integrated model is evaluated for both the cases crisp and fuzzy environments. Managerial insights and the effect of changes in the parameters’ values on the optimal inventory policy under fuzziness are presented.

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