Input Quantity Decision and Coordination Mechanism with Two Production Chances and Yield Uncertainty

2021 ◽  
pp. 1-35
Author(s):  
Jianhu Cai ◽  
Haining Sun ◽  
Xuejiao Li ◽  
Daji Ergu
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Coordination Mechanism ◽  
Market Demand ◽  
Input Quantity ◽  
Optimal Input ◽  
Trade Offs ◽  
Production Run ◽  
Yield Uncertainty

Conducting a second production run can improve the company’s capability of meeting the market demand. Few works examine optimal input quantity decisions under the mode with two production chances considering demand and yield uncertainty. We propose a vendor-managed inventory (VMI) supply chain with one supplier and one retailer. The supplier has two production chances and faces yield uncertainty in each production run. It is necessary for the supplier to make trade-offs between the cost and benefit of the second production run, then decide whether to conduct the second production run. We investigate the supplier’s optimal input quantity decision in each production run and obtain the supply chain members’ expected profits. As a comparison, the mode with one production chance is also developed. We find that two production chances can help improve the performance of the supply chain under yield uncertainty. A revenue-sharing contract is introduced to coordinate the supply chain with two production chances, and efficient profit allocation is achieved through adjusting the revenue-sharing ratio and the wholesale price. An extension is conducted for a sensitivity analysis of unit punishment cost on the supplier’s input quantity decisions.

scholarly journals Production Decision and Coordination Mechanism of Socially Responsible Closed-Loop Supply Chain

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-10
Author(s):  
Xiaofeng Long ◽  
Jiali Ge ◽  
Tong Shu ◽  
Chunxia Liu
Keyword(s):  
Supply Chain ◽  
Social Responsibility ◽  
Closed Loop ◽  
Wholesale Price ◽  
Consumer Surplus ◽  
Revenue Sharing ◽  
Coordination Mechanism ◽  
Patent Licensing ◽  
Socially Responsible ◽  
Closed Loop Supply Chain

Corporate social responsibility (CSR) has a significant impact on the operation of enterprises. This study analyzes the production and coordination decisions of closed-loop supply chain (CLSC) by establishing two assumptions of endogenous and exogenous CSR. The results reveal that, for ordinary consumers, CSR is quantified as the parameter of consumer surplus, which has an impact on the patent licensing fee, revenue-sharing ratio, and so on, and which not only increases the sales quantity in CLSC but also creates more value for the manufacturer and the retailer. Considering endogenous CSR, the study found that the manufacturer’s CSR level and the manufacturer’s and the retailer’s profits both increase with the proportion of CSR-sensitive consumers. In the endogenous model, the manufacturer sets a higher wholesale price and lower patent licensing fee than in the exogenous model. Perfect coordination in the two models can be achieved by setting a revenue-sharing ratio related to wholesale price and patent licensing fee. In practice, improving the social responsibility consciousness of consumers and raising enterprises’ CSR level can achieve a win-win situation for revenues and social welfare.

scholarly journals A Study on Supply Chain Emission Reduction Level Based on Carbon Tax and Consumers’ Low-Carbon Preferences under Stochastic Demand

2019 ◽  
Vol 2019 ◽  
pp. 1-20 ◽  
Author(s):  
Liang Wang ◽  
Tingjia Xu ◽  
Longhao Qin
Keyword(s):  
Supply Chain ◽  
Emission Reduction ◽  
Carbon Tax ◽  
Wholesale Price ◽  
Concave Function ◽  
Revenue Sharing ◽  
Market Demand ◽  
Low Carbon ◽  
Order Quantity ◽  
Stochastic Market

This article focuses on the level of supply chain emission reduction, taking into account consumers’ low-carbon preferences, stochastic market demand, and carbon tax policy. By introducing the emission reduction penalty mechanism and adopting reverse derivation method, it derives the revenue model of the retailer and the manufacturer in decentralized and centralized supply chain when the supply chain reduces emissions or is not under stochastic market demand. The research results are as follows. (i) The optimal retailer’s revenue is strictly monotonous increasing with respect to the consumers’ low-carbon preferences in the decentralized supply chain. However, in the centralized supply chain, the optimal revenue of the retailer and the manufacturer are strictly monotonously decreasing of the consumers’ low-carbon preferences respectively. (ii) The retailer’s revenue is a concave function of the order quantity, and there exists a unique order quantity that can maximize retailer’s revenue. The manufacturer’s revenue is a concave function of the wholesale price, and there exists a unique wholesale price that can maximize manufacturer’s revenue. (iii) When consumers’ low-carbon preferences are given, there is an optimal emission reduction level that maximizes the overall revenue of the supply chain. Furthermore, as the carbon tax increases, the optimal emission reduction level gradually rises. (iv) As the level of emission reduction in the supply chain increases, the range of the revenue sharing coefficient becomes larger, and it is easier for supply chain members to reach a revenue sharing contract. However, when consumers’ low-carbon preferences and carbon tax increase, the opposite is true.

scholarly journals Analysis on the Water Supply Chain Model under Revenue-Sharing Contract considering Marketing Effort, Water Purity

2021 ◽  
Vol 2021 ◽  
pp. 1-23
Author(s):  
Lijia Huang ◽  
Deshan Tang
Keyword(s):  
Supply Chain ◽  
Water Supply ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Chain Model ◽  
Marketing Effort ◽  
Market Demand ◽  
Revenue Sharing Contract ◽  
Comparison Results ◽  
Water Purity

A two-tier water supply chain including a manufacturer and a retailer under revenue-sharing contract is constructed. And the contribution of the model is that marketing effort and water purity has been considered. First, four models including the centralized model (model B) and decentralized models (models BM, I, and II) are established and analyzed. Second, the Stackelberg game model is used to discuss the pricing strategy of water supply chain members in centralized and decentralized scenarios. The comparison results show that revenue-sharing contract is beneficial to improve the level of product greening, the profit of supply chain members, and the overall profit of the water supply chain compared with model BM. However, it leads to the decrease of retailers’ green marketing efforts and the wholesale price of water. In addition, revenue-sharing contract through bargaining makes bigger influence than revenue-sharing contract. Marketing can stimulate the increase of the green product’s market demand on one hand, and on the other hand, it generates the amount of marketing cost. In this study, the profit is that marketing produces cannot offset the cost that it brings. Thus, it will be important to take some measures to make up the loss that marketing generated.

scholarly journals Design of risk sharing and coordination mechanism in supply chain under demand and supply uncertainty

2021 ◽  
Author(s):  
Chunyi Ji ◽  
Xiangxiang Liu
Keyword(s):  
Supply Chain ◽  
Risk Sharing ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Coordination Mechanism ◽  
Market Demand ◽  
Supply Uncertainty ◽  
Demand Forecast ◽  
Demand And Supply ◽  
Better Than

Perishable and short-life products can be seen everywhere in life. Due to the particularity of these products, they are more complicated in supply chain management. This paper studies whether the two-part tariff and ZRS contract can achieve the purpose of reducing risks and coordinating supply chain. We assume that market demand and supplier yield are uncertain, and we use game theory and probability distribution for research. The research results show that when the information is asymmetric, the manufacturer always ignore the demand forecast information provided by the retailer under the wholesale price contract. When the demand is uncertain, regardless of whether the information is symmetric or asymmetric, the two-part tariff contract and the ZRS contract can coordinate the supply chain and achieve maximum profit. When the retailer's degree of risk aversion is high, the ZRS contract is better than the two-part tariff, which can reduce the risk of retailers and achieve the purpose of coordinating the supply chain. When the supply is uncertain, the manufacturer can provide the supplier with a risk-sharing contract, including the return price and the sharing ratio that meet certain constraints. Such a contract can effectively reduce the supplier's risk and realize supply chain coordination.

scholarly journals A Coordinated Revenue-Sharing Model for a Sustainable Closed-Loop Supply Chain

2018 ◽  
Vol 10 (9) ◽  
pp. 3198 ◽  
Author(s):  
Hao Zou ◽  
Jin Qin ◽  
Peng Yang ◽  
Bo Dai
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Risk Aversion ◽  
Closed Loop ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Coordination Mechanism ◽  
Closed Loop Supply Chain ◽  
Revenue Sharing Contract ◽  
Decentralized Decision Making

This study takes a sustainable closed-loop supply chain composed of one manufacturer and two price-competitive retailers as the object and considers the two-way risk aversion characteristics of manufacturers and retailers in examining the coordination mechanism in a closed-loop supply chain. Using game theory, optimal decision-making on wholesale prices, retail prices, and recycling prices are explored under decentralized and centralized decision-making scenarios, and representative expressions are established. By analyzing the effects of the risk aversion coefficient on players’ optimal strategies, we found that the manufacturer’s and retailers’ risk aversion coefficients have different effects on the wholesale price, retail price, and recycling price under decentralized decision-making, while in a centralized decision-making scenario, the effects are the same. The comparison also found that the wholesale price and recovery price under the centralized decision-making scenario are higher than those under decentralized decision-making. To achieve closed-loop supply chain coordination, we propose a revenue-sharing contract that we demonstrate by coordinating price competition with risk aversion and analyze a range of parameters that influence the revenue-sharing contract. The results show that the proposed contract can increase the profits of supply chain members by identifying the optimal revenue-sharing ratio.

Pricing and service decision of dual-channel operations in an O2O closed-loop supply chain

2017 ◽  
Vol 117 (8) ◽  
pp. 1567-1588 ◽  
Author(s):  
Lingcheng Kong ◽  
Zhiyang Liu ◽  
Yafei Pan ◽  
Jiaping Xie ◽  
Guang Yang
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Service Level ◽  
Return Rate ◽  
Transfer Payment ◽  
Channel Conflict ◽  
Content Type ◽  
Dual Channel

Purpose The online direct selling mode has been widely accepted by enterprises in the O2O era. However, the dual-channel (online/offline, forward/backward) operations of the closed-loop supply chain (CLSC) changed the relationship between manufacturers and retailers, thus resulting in channel conflict. The purpose of this paper is to take a dual-channel operations of CLSC as the research target, where a manufacturer sells a single product through a direct e-channel as well as a conventional retail channel; the retailer are responsible for collecting used products in the reverse supply chain and the manufacturer are responsible for remanufacturing. Design/methodology/approach The authors build a benchmark model of dual-channel price and service competition and take the return rate, which is considered to be related to the service level of the retailer, as the function of the service level to extend the model in the reverse SC. The authors then analyze the optimal pricing and service decision under centralization and decentralization, respectively. Finally, with the revenue-sharing factor, wholesale price and recycling price transfer payment coefficient as contract parameters, the paper also designs a revenue-sharing contract led by the manufacturer and explores in what situation the contract could realize the Pareto optimization of all players. Findings In the baseline model, the results show that optimal price and service level correlate positively in centralization; however, the relation relies on consumers’ price sensitivity in decentralization. In the extension model, the relationship between price and service level also relies on the relative value of increased service cost and remanufacturing saved cost. When the return rate correlates with the service level, a recycling transfer payment can elevate the service level and thus raise the return rate. Through analyzing the parameters in revenue-sharing contract, a point can be reached where lowering the wholesale price and raising the transfer payment coefficient will promote retailers to share revenue. Practical implications Many enterprises establish the dual-channel distribution system both online and offline, which need to understand how to resolve their channel conflict. The conflict is especially strong in CLSC with remanufacturing. The result helps the node enterprises realize the coordination of the dual-channel CLSC. Originality/value It takes into account the fact that there are two complementary relationships, such as online selling and offline delivery; used product recycling and remanufacturing. The authors optimize the strategy of product pricing and service level in order to solve channel conflict and double marginalization in the closed-loop dual-channel distribution network.

Revenue Sharing Contract of Green Supply Chain under Manufacturer Risk-Aversion

2014 ◽  
Vol 697 ◽  
pp. 482-487
Author(s):  
Shi Ying Jiang ◽  
Chun Yan Ma
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Risk Aversion ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Green Supply Chain ◽  
Game Model ◽  
Product Price ◽  
Revenue Sharing Contract

Background on two stages green supply chain consisting of a manufacturer and a retailer, considering the degree of risk aversion and product greenness, consumer preferences and other factors, the centralized decision-making game model and manufacturer-leading Stackelberg game model are established.Then two game models are compared. The interaction of product greenness, wholesale price, product price,and risk aversion utility for manufacturers and retailers are also disscussed. Finally, the revenue sharing contract is applied to coordinate the green supply chain . The results show that:(1) In the centralized decision-making model, there is a critical value of the product green degree; (2)In manufacturer-leading Stackelberg game model, the higher the green degree of the product, the higher the manufacturer's wholesale price,and the wholesale price increases as risk aversion degree of manufacturers improves;(3)The revenue sharing contract can coordinate this type of green supply chain under manufacturers risk-averse.

Contracts and Information Structure in a Supply Chain with Operations and Marketing Interaction

2016 ◽  
Vol 18 (04) ◽  
pp. 1650014 ◽  
Author(s):  
Fouad El Ouardighi ◽  
Gary Erickson ◽  
Dieter Grass ◽  
Steffen Jørgensen
Keyword(s):  
Supply Chain ◽  
Information Structure ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Open Loop ◽  
The State ◽  
Current State ◽  
Marketing Activities ◽  
Purchase Rate ◽  
The Impact

The objective of the paper is to study how wholesale price and revenue sharing contracts affect operations and marketing decisions in a supply chain under different dynamic informational structures. We suggest a differential game model of a supply chain consisting of a manufacturer and a single retailer that agree on the contract parameters at the outset of the game. The model includes key operational and marketing activities related to a single product in the supply chain. The manufacturer sets a production rate and the rate of advertising efforts while the retailer chooses a purchase rate and the consumer price. The state of the game is summarized in the firms’ backlogs and the manufacturer’s advertising goodwill. Depending on whether the supply chain members have and share state information, they may either make decisions contingent on the current state of the game (feedback Nash strategy), or precommit to a plan of action during the whole game (open-loop Nash strategy). Given a contract type, the impact of the availability of information regarding the state of the game on the firms’ decisions and payoffs is investigated. It is shown that double marginalization can be better mitigated if the supply chain members adopt a contingent strategy under a wholesale price contract and a commitment strategy under a revenue sharing contract.

Understanding the role of big data analytics for coordination of electronic retail service supply chain

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fatao Wang ◽  
Di Wu ◽  
Hongxin Yu ◽  
Huaxia Shen ◽  
Yuanjun Zhao
Keyword(s):  
Big Data ◽  
Supply Chain ◽  
Data Analysis ◽  
Big Data Analytics ◽  
Big Data Analysis ◽  
Coordination Mechanism ◽  
Market Demand ◽  
Content Type ◽  
Service Supply Chain ◽  
Retail Service

PurposeBased on the typical service supply chain (SSC) structure, the authors construct the model of e-tailing SSC to explore the coordination relationship in the supply chain, and big data analysis provides realistic possibilities for the creation of coordination mechanisms.Design/methodology/approachAt the present stage, the e-commerce companies have not yet established a mature SSC system and have not achieved good synergy with other members of the supply chain, the shortage of goods and the greater pressure of express logistics companies coexist. In the case of uncertain online shopping market demand, the authors employ newsboy model, applied in the operations research, to analyze the synergistic mechanism of SSC model.FindingsBy analyzing the e-tailing SSC coordination mechanism and adjusting relevant parameters, the authors find that the synergy mechanism can be implemented and optimized. Through numerical example analysis, the authors confirmed the feasibility of the above analysis.Originality/valueBig data analysis provides a kind of reality for the establishment of online SSC coordination mechanism. The establishment of an online supply chain coordination mechanism can effectively promote the efficient allocation of supplies and better meet consumers' needs.

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