Two echelon supply chain with price dependent demand and premium payment scheme

2021 ◽  
Vol 12 (2) ◽  
pp. 116
Author(s):  
Reena Jain ◽  
Mona Verma
Keyword(s):  
Supply Chain ◽  
Payment Scheme ◽  
Premium Payment ◽  
Dependent Demand

scholarly journals Impact of Price-Sensitive Demand and Premium Payment Scheme on Bullwhip Effect

2022 ◽  
Vol 15 (1) ◽  
pp. 1-24
Author(s):  
Mona Verma ◽  
Reena Jain ◽  
Chandra K. Jaggi
Keyword(s):  
Supply Chain ◽  
Numerical Analysis ◽  
Lead Time ◽  
Bullwhip Effect ◽  
Capacity Constraints ◽  
Price Variation ◽  
Payment Scheme ◽  
Premium Payment ◽  
The Impact

Bullwhip effect reduces the efficiency, responsiveness, and value of the supply chain. There are some indirect causes like lead time, the number of echelons, and some direct causes of bullwhip effect such as rationing or price variation. Due to capacity constraints, retailers are forced to experience rationing of their demands. Fear of rationing usually gives rise to manipulable demand and hence increases the bullwhip effect. Moreover, if the retailer’s demand is price sensitive then it will cause price variation. The offerings of premium payment by retailers due to unfulfilled demand lure the supplier to extend his existing capacity and to allocate them more supply. In this paper, an attempt has been made to mitigate the impact of the bullwhip effect using a premium payment scheme. A technique has been coined that will help in reducing the bullwhip effect. The increased value of the supply chain on using a premium payment scheme is proof of the reduction of the bullwhip effect. Results are validated through numerical analysis.

scholarly journals Impact of Price Sensitive Demand and Premium Payment Scheme on Bullwhip Effect

2022 ◽  
Vol 15 (1) ◽  
pp. 0-0
Keyword(s):  
Supply Chain ◽  
Numerical Analysis ◽  
Lead Time ◽  
Bullwhip Effect ◽  
Capacity Constraints ◽  
Price Variation ◽  
Payment Scheme ◽  
Premium Payment ◽  
The Impact

Bullwhip effect reduces the efficiency, responsiveness, and value of the supply chain. There are some indirect causes like lead time, the number of echelons, and some direct causes of bullwhip effect such as rationing or price variation. Due to capacity constraints, retailers are forced to experience rationing of their demands. Fear of rationing usually gives rise to manipulable demand and hence increases the bullwhip effect. Moreover, if the retailer’s demand is price sensitive then it will cause price variation. The offerings of premium payment by retailers due to unfulfilled demand lure the supplier to extend his existing capacity and to allocate them more supply. In this paper, an attempt has been made to mitigate the impact of the bullwhip effect using a premium payment scheme. A technique has been coined that will help in reducing the bullwhip effect. The increased value of the supply chain on using a premium payment scheme is proof of the reduction of the bullwhip effect. Results are validated through numerical analysis.

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.

scholarly journals Coordinating a Supply Chain with a Loss-Averse Retailer and Effort Dependent Demand

2014 ◽  
Vol 2014 ◽  
pp. 1-12 ◽  
Author(s):  
Liying Li ◽  
Yong Wang
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Loss Aversion ◽  
Special Class ◽  
Numerical Study ◽  
Supply Chain Performance ◽  
Channel Coordination ◽  
Gain Loss ◽  
Decision Making Behavior ◽  
Dependent Demand

This study investigates the channel coordination issue of a supply chain with a risk-neutral manufacturer and a loss-averse retailer facing stochastic demand that is sensitive to sales effort. Under the loss-averse newsvendor setting, a distribution-free gain/loss-sharing-and-buyback (GLB) contract has been shown to be able to coordinate the supply chain. However, we find that a GLB contract remains ineffective in managing the supply chain when retailer sales efforts influence the demand. To effectively coordinate the channel, we propose to combine a GLB contract with sales rebate and penalty (SRP) contract. In addition, we discover a special class of gain/loss contracts that can coordinate the supply chain and arbitrarily allocate the expected supply chain profit between the manufacturer and the retailer. We then analyze the effect of loss aversion on the retailer’s decision-making behavior and supply chain performance. Finally, we perform a numerical study to illustrate the findings and gain additional insights.

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