scholarly journals Profitability vs. Stability: The Choice of Trading Strategies in a Capacity Sharing Supply Chain

2021 ◽  
Vol 2021 ◽  
pp. 1-18
Author(s):  
Hongshuai Han ◽  
Mengdi Yao

Supported by a third-party capacity sharing platform, manufacturers can share capacities with others to match the rapidly changing demand. Both the capacity requestor and the capacity provider can choose to seek or wait for matches, forming different trading strategies (capacity- and demand-driven strategies). Based on the game and chaos theories, this paper analyzes the preference of the capacity provider, the capacity requestor, and the capacity platform operator on different trading strategies from the aspects of profitability and stability. It finds that the platform operator values stability much more than profitability, although the latter may reach higher optimal expected profits. The preference of each supply chain member is influenced by the production cost, potential market size, and the limited capacity of the capacity requestor. A stable system can result in higher long-run profits than a profitable system. We further propose the all-win situation for the capacity provider, capacity requestor, and platform operator.

Author(s):  
Lei Xie ◽  
Hongshuai Han

Many small manufacturing factories suffer insufficient environment-friendly capacity after eliminating the outdated and environmental-harmful production capacity according to stringent environmental rules and regulations. This paper analyzes two strategies that the manufacturer with limited environment-friendly capacity may take to tackle this problem, i.e., investing in building environment-friendly capacities and collaborating with the manufacturer with sufficient environment-friendly capacity in capacity sharing. In a supply chain with two competing manufacturers, this paper builds game-theoretical models and investigates equilibrium solutions under three scenarios (no capacity investment or sharing, capacity investment, and capacity sharing). Then this research investigates the feasible regions of these two strategies and compares the performance of each manufacturer under each scenario. The findings show that both capacity investment and capacity sharing can effectively reduce the profit loss of the manufacturer with limited capacity, while only capacity sharing benefits both manufacturers. The feasibility of these two strategies depends on the initial capacity volume and the capacity investment cost coefficient of the manufacturer with limited capacity. Moreover, the preference of the manufacturer with limited capacity for each strategy depends on the capacity investment cost coefficient. When the capacity investment cost coefficient is relatively high, the win-win situation exists for supply chain members. Furthermore, with the use of chaos theory, the paper shows how to adjust the capacity investment in each period to keep the system stable.


Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-12
Author(s):  
Daozhi Zhao ◽  
Hongshuai Han

In the manufacturing capacity sharing platform, considering the manufacturing capacity provider’s cost misreporting behavior and the collusion behavior of the platform operator, this paper built a supply chain consisting of a platform operator, a capacity provider with surplus capacity, and a manufacturer with insufficient capacity. This paper studied the influence of the cost misreporting behavior on the supply chain members’ decisions and profits. By use of the game theory, in the scenarios including the supplier misreporting to other supply chain members and the supplier colluding with the platform, the paper analyzed the optimal pricing decision, misreporting coefficient decision, and platform’s service fee decision and further compared the profits of the supply chain and its members. The results show that the capacity provider tends to overstate the production cost for gaining more profits, which exerts negative effects on profits of other members and the supply chain. Compared with the case of misreporting to both the manufacturer with insufficient capacity and the platform, the case of colluding with platform is more favorable to the profits of the manufacturer, the platform, and the supply chain, while the supplier prefers to choose the former situation. When the sales revenue-sharing proportion, cost-sharing proportion, and service fee satisfy certain conditions, the sales revenue-sharing and cost-sharing contract can avoid the capacity provider’s cost misreporting behavior and coordinate the supply chain.


Author(s):  
Lily N Edwards-Callaway ◽  
M Caitlin Cramer ◽  
Caitlin N Cadaret ◽  
Elizabeth J Bigler ◽  
Terry E Engle ◽  
...  

ABSTRACT Shade is a mechanism to reduce heat load providing cattle with an environment supportive of their welfare needs. Although heat stress has been extensively reviewed, researched, and addressed in dairy production systems, it has not been investigated in the same manner in the beef cattle supply chain. Like all animals, beef cattle are susceptible to heat stress if they are unable to dissipate heat during times of elevated ambient temperatures. There are many factors that impact heat stress susceptibility in beef cattle throughout the different supply chain sectors, many of which relate to the production system, i.e. availability of shade, microclimate of environment, and nutrition management. The results from studies evaluating the effects of shade on production and welfare are difficult to compare due to variation in structural design, construction materials used, height, shape, and area of shade provided. Additionally, depending on operation location, shade may or may not be beneficial during all times of the year, which can influence the decision to make shade a permanent part of management systems. Shade has been shown to lessen the physiologic response of cattle to heat stress. Shaded cattle exhibit lower respiration rates, body temperatures, and panting scores compared to un-shaded cattle in weather that increases the risk of heat stress. Results from studies investigating the provision of shade indicate that cattle seek shade in hot weather. The impact of shade on behavioral patterns is inconsistent in the current body of research, some studies indicating shade provision impacts behavior and other studies reporting no difference between shaded and un-shaded groups. Analysis of performance and carcass characteristics across feedlot studies demonstrated that shaded cattle had increased ADG, improved feed efficiency, HCW, and dressing percentage when compared to cattle without shade. Despite the documented benefits of shade, current industry statistics, although severely limited in scope, indicate low shade implementation rates in feedlots and data in other supply chain sectors do not exist. Industry guidelines and third party on-farm certification programs articulate the critical need for protection from extreme weather but are not consistent in providing specific recommendations and requirements. Future efforts should include: updated economic analyses of cost versus benefit of shade implementation, exploration of producer perspectives and needs relative to shade, consideration of shade impacts in the cow-calf and slaughter plant segments of the supply chain, and integration of indicators of affective (mental) state and preference in research studies to enhance the holistic assessment of cattle welfare.


Sensors ◽  
2021 ◽  
Vol 21 (16) ◽  
pp. 5307
Author(s):  
Ricardo Borges dos Santos ◽  
Nunzio Marco Torrisi ◽  
Rodrigo Palucci Pantoni

Every consumer’s buying decision at the supermarket influences food brands to make first party claims of sustainability and socially responsible farming methods on their agro-product labels. Fine wines are often subject to counterfeit along the supply chain to the consumer. This paper presents a method for efficient unrestricted publicity to third party certification (TPC) of plant agricultural products, starting at harvest, using smart contracts and blockchain tokens. The method is capable of providing economic incentives to the actors along the supply chain. A proof-of-concept using a modified Ethereum IGR token set of smart contracts using the ERC-1155 standard NFTs was deployed on the Rinkeby test net and evaluated. The main findings include (a) allowing immediate access to TPC by the public for any desired authority by using token smart contracts. (b) Food safety can be enhanced through TPC visible to consumers through mobile application and blockchain technology, thus reducing counterfeiting and green washing. (c) The framework is structured and maintained because participants obtain economical incentives thus leveraging it´s practical usage. In summary, this implementation of TPC broadcasting through tokens can improve transparency and sustainable conscientious consumer behaviour, thus enabling a more trustworthy supply chain transparency.


Mathematics ◽  
2021 ◽  
Vol 9 (3) ◽  
pp. 253
Author(s):  
Yuyan Wang ◽  
Zhaoqing Yu ◽  
Liang Shen ◽  
Runjie Fan ◽  
Rongyun Tang

Considering the peculiarities of logistics in the electronic commerce (e-commerce) supply chain (ESC) and e-commerce platform’s altruistic preferences, a model including an e-commerce platform, third-party logistics service provider, and manufacturer is constructed. Based on this, three decision models are proposed and equilibrium solutions are obtained by the Stackelberg game. Then, an “altruistic preference joint fixed-cost” contract is proposed to maximize system efficiency. Finally, numerical analysis is used to validate the findings of the paper. The article not only analyzes and compares the optimal decisions under different ESC models, but also explores the intrinsic factors affecting the decisions. This paper finds that the conclusions of dual-channel supply chains or traditional supply chains do not necessarily apply to ESC, and that the effect of altruistic behavior under ESC is influenced by consumer preferences. Moreover, there is a multiparty win–win state for ESC, and this state can be achieved through the “altruistic preference joint fixed-cost” contract. Therefore, the findings of this paper contribute to the development of an e-commerce market and the cooperation of ESC members.


2021 ◽  
pp. 1-15
Author(s):  
Sudip Adak ◽  
G.S. Mahapatra

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.


Author(s):  
Chinmay Sane ◽  
Conrad S. Tucker

With continued emphasis on sustainability-driven design, reverse logistics is emerging as a vital competitive supply chain strategy for many of the global high-tech manufacturing firms. Various original equipment manufacturers (OEMs) and multi-product manufacturing firms are enhancing their reverse logistics strategies in order to establish an optimal closed-loop supply chain through which they can introduce refurbished variants of their products back into the market. While a refurbished product strategy helps to mitigate environmental impact challenges as well as provide additional economic benefits, it is limited to an existing product market, possibly a subset of the existing market, and fails to commercialize/target new markets. In addition to refurbishing, the alternatives available for utilizing End-Of-Life (EOL) products are currently restricted to recycling and permanent disposal. In this work, the authors propose employing a new EOL option called “resynthesis” that utilizes existing waste from EOL products in a novel way. This is achieved through the synthesis of assemblies/subassemblies across multiple domains. The “newly” synthesized product can then be incorporated into the dynamics of a closed-loop supply chain. The proposed methodology enables OEMs to not only offer refurbished products as part of their reverse logistics strategy, but also provide them with resynthesized product concepts that can be used to expand to new/emerging markets. The proposed methodology provides a general framework that includes OEMs (manufacturers of the original product), retailers (distributors of the original product and collectors of the EOL products) and third-party firms (managers of the EOL products) as part of a closed-loop supply chain strategy. The proposed methodology is compared with the existing methodologies in the literature wherein a third-party supplies the OEM only with refurbished products and supplies products unsuitable for refurbishing to another firm(s) for recycling/disposal. A case study involving a multi-product electronics manufacturer is presented to demonstrate the feasibility of the proposed methodology.


Author(s):  
Ju Myung Song ◽  
Yao Zhao

Problem definition: We study the coordination of an E-commerce supply chain between online sellers and third party shippers to meet random demand surges, induced by, for instance, online shopping holidays. Academic/practical relevance: Motivated by the challenge of meeting the unpredictable demand surges in E-commerce, we study shipping contracts and supply chain coordination between online sellers and third party shippers in a novel model taking into account the unique features of the shipping industry. Methodology: We compare two shipping contracts: the risk penalty (proposed by UPS) and the flat rate (used by FedEx), and analyze their impact on the seller, the shipper, and the supply chain. Results: Under information symmetry, the sophisticated risk penalty contract is no better than the simple flat rate contract for the shipper, against common belief. Although both the risk penalty and the flat rate can coordinate the supply chain, the risk penalty does so only if the shipper makes zero profit, but the flat rate can provide a positive profit for both. These results represent a new form of double marginalization and risk-sharing, in sharp contrast to the well-known literature on the classic supplier-retailer supply chain, where risk-sharing contracts (similar to the risk penalty) can bring benefits to all parties, but the single wholesale price contract (similar to the flat rate) can achieve supply chain coordination only when the supplier makes zero profit. We also find that only the online seller, but not the shipper, has the motivation to vertically integrate the seller-shipper supply chain. Under information asymmetry, however, the risk penalty brings more benefit to the shipper than the flat rate, but hurts the seller and the supply chain. Managerial implications: Our results imply that information plays an important role in the shipper’s choices of shipping contracts. Under information symmetry, the risk penalty is unnecessarily complex because the simple flat rate is as good as the risk penalty for the shipper; moreover, it is better for the seller-shipper coordination. However, under information asymmetry, the shipper faces additional shipping risk that can be offset by the extra flexibility of the risk penalty. Our study also explains and supports the recent practice of online sellers (e.g., Amazon.com and JD.com), but not shippers, to vertically integrate the supply chain by consistently expanding their shipping capabilities.


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