scholarly journals Optimal Decisions and Financing Strategies Selection of Supply Chain with Capital Constraint

2016 ◽  
Vol 2016 ◽  
pp. 1-14 ◽  
Author(s):  
Bo Wang ◽  
De-Chun Huang ◽  
Hai-yan Li ◽  
Ji-Yong Ding
Keyword(s):  
Supply Chain ◽  
Decision Model ◽  
Numerical Study ◽  
Order Quantity ◽  
Optimal Production ◽  
Optimal Decisions ◽  
Financing Mode ◽  
Procurement Contract ◽  
Production Quantity ◽  
Selection Of

Two financing modes can be considered for manufacturer’s production capital constrained: RPFM (retailer’s prepayment financing mode) and PCFM (procurement contract financing mode). Under the RPFM, the retailer places order in advance for a discount price and makes prepayment; manufacturer is able to finance from a bank as production quantity cannot satisfy the second-order quantity of retailer. By contrast, manufacturers make financing from commercial banks based on the procurement contract with upstream supplier under the PCFM. Taking into account the relation between production volumes with the manufacturer’s own capital and retailer’s order quantity, the optimal production and financing decision model for manufacturer under these two financing modes are built. Moreover, the profits of the manufacturer, the retailer, and the supply chain are compared and discussed. Results show that both of the two modes can create new value and profit for the supply chain with capital constraint and achieve optimal production under “newsvendor” mode; the supply chain has the better performance under the RPFM than that achieved under the PCFM. Also, under the RPFM, the manufacturer’s production and the profit of the whole supply chain would be increased when the manufacturer makes the second financing. Similar conclusion is reached under the PCFM. Finally, numerical study was given to demonstrate the conclusions.

scholarly journals Coordination of a Random Yield Supply Chain with a Loss-Averse Supplier

2015 ◽  
Vol 2015 ◽  
pp. 1-11 ◽  
Author(s):  
Jiarong Luo ◽  
Xu Chen
Keyword(s):  
Supply Chain ◽  
Loss Aversion ◽  
Optimal Order ◽  
Random Yield ◽  
Order Quantity ◽  
Optimal Production ◽  
Numerical Examples ◽  
Risk Neutral ◽  
Production Quantity ◽  
Optimal Order Quantity

This paper investigates the coordination of a supply chain consisting of a loss-averse supplier and a risk-neutral buyer who orders products from the supplier who suffers from random yield to meet a deterministic demand. We derive the risk-neutral buyer’s optimal order policy and the loss-averse supplier’s optimal production policy under shortage-penalty-surplus-subsidy (SPSS) contracts. We also analyze the impacts of loss aversion on the loss-averse supplier’s production decision making and find that the loss-averse supplier may produce less than, equal to, or more than the risk-neutral supplier. Then, we provide explicit conditions on which the random yield supply chain with a loss-averse supplier can be coordinated under SPSS contracts. Finally, adopting numerical examples, we find that when the shortage penalty is low, the buyer’s optimal order quantity will increase, while the supplier’s optimal production quantity will first decrease and then increase as the loss aversion level increases. When the shortage penalty is high, the buyer’s optimal order quantity will decrease but the supplier’s optimal production quantity will always increase as the loss aversion level increases. Furthermore, the numerical examples provide strong evidence for the view that SPSS contracts can effectively improve the performance of the whole supply chain.

scholarly journals Optimal Financing Order Decisions of a Supply Chain under the Retailer's Delayed Payment

2014 ◽  
Vol 2014 ◽  
pp. 1-8 ◽  
Author(s):  
Honglin Yang ◽  
Ya Yu ◽  
Yong Zha ◽  
Jijun Yuan
Keyword(s):  
Numerical Simulation ◽  
Supply Chain ◽  
Trade Credit ◽  
Equilibrium Analysis ◽  
Optimal Order ◽  
Order Quantity ◽  
Optimal Decisions ◽  
Game Equilibrium ◽  
Optimal Order Quantity ◽  
To Receive

In real supply chain, a capital-constrained retailer has two typical payment choices: the up-front payment to receive a high discount price or the delayed payment to reduce capital pressure. We compare with the efficiency of optimal decisions of different participants, that is, supplier, retailer, and bank, under both types of payments based on a game equilibrium analysis. It shows that under the equilibrium, the delayed payment leads to a greater optimal order quantity from the retailer compared to the up-front payment and, thus, improves the whole benefit of the supply chain. The numerical simulation for the random demand following a uniform distribution further verifies our findings. This study provides novel evidence that a dominant supplier who actively offers trade credit helps enhance the whole efficiency of a supply chain.

Decision Models of Supply Chain Under Asymmetric Information with Demand Disruption

2010 ◽  
Vol 143-144 ◽  
pp. 773-781
Author(s):  
Xin Rong Jiang ◽  
Yong Chao Li
Keyword(s):  
Supply Chain ◽  
Asymmetric Information ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Retail Price ◽  
Expected Profit ◽  
Decision Models ◽  
Market Demand ◽  
Optimal Production ◽  
Production Quantity

This paper studied the influence of asymmetric information and demand disruption on the decision of the supply chain. We analyzed the supply chain decision models based on a Stackelberg game under normal circumstances and demand disruption situation. The conclusion indicates when the market demand is disrupted, the optimal wholesale price, the retail price, the supplier’s expected profit and the supply chain system’s expected profit change in the same direction as the demand disruption, while the optimal production quantity and the retailer’s profit both have certain robustness under disruption. Finally we gave a numerical example to illustrate our analysis.

Push or Pull? Perishable Products with Freshness-Keeping Effort

2019 ◽  
Vol 36 (01) ◽  
pp. 1950008
Author(s):  
Lianmin Zhang ◽  
Lei Guan ◽  
Yong-Hong Kuo ◽  
Houcai Shen
Keyword(s):  
Supply Chain ◽  
Living Standards ◽  
Analytical Models ◽  
Numerical Comparison ◽  
Order Quantity ◽  
Gradual Improvement ◽  
Logistics Distribution ◽  
Optimal Decisions ◽  
Fresh Products ◽  
Push Model

With the gradual improvement of living standards, people’s consumption levels and habits are changing. One notable fact is that the demand for fresh products is growing steadily. Accordingly, fresh-product preservation and logistics distribution also require higher standards. Based on the practice of fresh domestic transport and preservation, for which the producer and the distributor are responsible, this paper discusses their optimal decisions taking into account the freshness-keeping effort of the distributor. Our main contributions include the derivations of the optimal decisions of the order quantity and the freshness-keeping effort in both the pull and push models, which are common in practice but have not been studied in the literature. Our analytical models lead to the result that, all other settings being the same, the distributor always puts a greater effort into preserving the product quality in the pull model than in the push model. This phenomenon results in a greater distributor’s order quantity and producer’s shipping quantity in the pull model. We also conduct a comprehensive numerical comparison of the effects of different modulating factors, including the price and the proportion and variation of surviving quantity, in these two settings. We find that the profits of the participants and the supply chain are always larger in the pull model, which indicates that the pull model is a better choice for the supply chain.

scholarly journals Optimal ordering policy in a two-echelon supply chain model with variable backorder and demand uncertainty

2020 ◽  
Author(s):  
Sumon Sarkar ◽  
B. C. Giri
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Demand Uncertainty ◽  
Trade Credit ◽  
Chain Model ◽  
Order Quantity ◽  
Optimal Decisions ◽  
Solution Algorithms ◽  
Supply Chain Model ◽  
Credit Financing

The paper investigates a two-echelon production-delivery supply chain model for products with stochastic demand and backorder-lost sales mixture under trade-credit financing. The manufacturer delivers the retailer's order quantity in a number of equal-sized shipments. The replenishment lead-time is such that it can be crashed to a minimum duration at an additional cost that can be treated as an investment. Shortages in the retailer's inventory are allowed to occur and are partially backlogged with a backlogging rate dependent on customer's waiting time. Moreover, the manufacturer offers the retailer a credit period which is less than the reorder interval. The model is formulated to find the optimal solutions for order quantity, safety factor, lead time, and the number of shipments from the manufacturer to the retailer in light of both distribution-free and known distribution functions. Two solution algorithms are provided to obtain the optimal decisions for the integrated system. The effects of controllable lead time, backorder rate and trade-credit financing on optimal decisions are illustrated through numerical examples.

scholarly journals Multiperiod Production and Ordering Policies for a Retailer-Led Supply Chain through Option Contracts

2018 ◽  
Vol 2018 ◽  
pp. 1-17 ◽  
Author(s):  
Nana Wan ◽  
Xu Chen
Keyword(s):  
Supply Chain ◽  
Call Option ◽  
Order Quantity ◽  
Dominant Position ◽  
Service Levels ◽  
Option Contracts ◽  
Exercise Price ◽  
Stock Type ◽  
Production Quantity ◽  
Dominant Retailer

This paper formulates two groups of multiperiod production and ordering models with call and bidirectional option contracts for a two-party supply chain consisting of one followed supplier and one dominant retailer, respectively. Based on dynamic programming theory, we characterize the optimal policy structures for two partners in each period. We also provide an approximation for the corresponding policy parameters evaluation in two cases. Then, we investigate the impacts of different option contracts and the demand risk on the decisions and performances of two members. Our results suggest that, whether concerning call or bidirectional option contracts, the optimal policies for two members always follow a base stock type. When the price parameters are the same for different option contracts, the service levels of both the system and the retailer are higher with call option contracts than with bidirectional ones, whereas the retailer’s inventory risk is lower with bidirectional option contracts than with call ones. Under the same conditions stated above, call option contracts can always benefit the supplier, but not the retailer. Owing to the retailer’s dominant position, call option contracts are better choice for the supply chain if the option (exercise) price is low (high), while bidirectional option contracts are more suitable choice for the supply chain if the option (exercise) price is high (low). In addition, an increase in the demand risk would prompt the supplier to increase his production quantity and the retailer to reduce the initial firm order quantity, either with call or bidirectional option contracts.

scholarly journals Optimal Decisions for a Fuzzy Two-Echelon Supply Chain

2014 ◽  
Vol 2014 ◽  
pp. 1-8 ◽  
Author(s):  
Qingfeng Song ◽  
Kai Shi ◽  
Sheng Lin ◽  
Guangping Xu
Keyword(s):  
Supply Chain ◽  
Decision Model ◽  
Decision Models ◽  
Equilibrium Solutions ◽  
Supply Chain System ◽  
Market Structures ◽  
Optimal Decisions ◽  
Game Theoretical Approach ◽  
Selling Effort ◽  
Optimistic Value

This paper discusses the optimal decisions of pricing and selling effort for a two-echelon supply chain with uncertain consumer demands, manufacturing costs, and selling costs. In order to maximize theα-optimistic value of the profits, based on different market structures, one centralized decision model and three decentralized decision models are developed, and the corresponding analytical equilibrium solutions are obtained using the game-theoretical approach. The results illustrate that no matter what decision case is, the optimal retail and wholesale prices in the case of considering selling effort are, respectively, larger than those of no selling effort; the optimal profits of the manufacturer, the retailer, and the whole supply chain system in the case of considering selling effort are, respectively, larger than those of no selling effort except for the profit of the retailer in the case that the manufacturer plays the leader’s role. Finally, one numerical example is presented, which illustrates the effectiveness of the proposed models.

Study on an Inventory Decision Model in an Assembly System

2010 ◽  
Vol 97-101 ◽  
pp. 2393-2396
Author(s):  
Jian Hu Cai
Keyword(s):  
Supply Chain ◽  
Decision Model ◽  
Assembly System ◽  
Newsvendor Model ◽  
Numerical Example ◽  
Optimal Decisions ◽  
Inventory Decision

In this paper, an assembly system with two suppliers and one assembler is introduced, and the supply chain operates under a VMI mode. Traditionally the suppliers decide their inventory quantity before the selling season, which is a classical newsvendor model. This paper assumes that the suppliers also can supplement products if the demand is unmet in the selling season. All members’ optimal decisions are gained. And a numerical example is introduced to illustrate our findings.

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