Design of coordination contract for quality control-based supply chain under consumer balking behavior with fuzzy environment

2021 ◽  
pp. 1-11
Author(s):  
Chongfeng Lan
Keyword(s):  
Decision Making ◽  
Quality Control ◽  
Supply Chain ◽  
Wholesale Price ◽  
Real Life ◽  
Optimal Strategies ◽  
Optimal Decision ◽  
Fuzzy Environment ◽  
Decentralized Decision Making ◽  
Optimal Decision Making

Considering the ubiquity of consumer balking behavior (CBB) in real-life economics and the importance of product quality control (QC) to supply chain (SC) competitiveness, this paper explores the SC coordination under both the QC and the CBB. Specifically, the consumer’s loss aversion behavior was illustrated at a fixed balking probability, and the SC models were created for centralized and decentralized decision-making modes. After that, the optimal strategies for the retailer and the manufacturer were identified, and the comparative static analysis was adopted to explore the effects of the CBB and QC on the optimal decision-making of the SC. The research results show that the QC-based SC under the CBB cannot be coordinated by wholesale price contract alone, but can be coordinated perfectly by this contract when the retailer shares the quality effort and the manufacturer shares the oversupply cost and analyzed through the fuzzy environment with the formulation. This finding sheds new light on the theory and application of wholesale price contract in SC coordination. Finally, the parameter sensitivity analysis was performed on balking probability and product qualification rate (PQR) through numerical experiments, which further discloses the impacts of the CBB and product QC on the optimal decision-making and profit of the SC.

Operation decision of logistics service supply chain: considering interruption probability in emergencies

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Guangsheng Zhang ◽  
Xiao Wang ◽  
Zhiqing Meng ◽  
Qirui Zhang ◽  
Kexin Wu
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Evolutionary Game ◽  
Optimal Strategies ◽  
Optimal Decision ◽  
Content Type ◽  
Logistics Service ◽  
Social Reputation ◽  
Punishment Intensity ◽  
Optimal Decision Making

PurposeTo remedy the inherent defect in current research that focuses only on a single type of participants, this paper endeavors to look into the situation as an evolutionary game between a representative Logistics Service Integrator (LSI) and a representative Functional Logistics Service Provider (FLSP) in an environment with sudden crisis and tries to analyze how LSI supervises FLSP's operations and how FLSP responds in a recurrent pattern with different interruption probabilities.Design/methodology/approachRegarding the risks of supply chain interruption in emergencies, this paper develops a two-level model of single LSI and single FLSP, using Evolutionary Game theory to analyze their optimal decision-making, as well as their strategic behaviors on different risk levels regarding the interruption probability to achieve the optimal return with bounded rationality.FindingsThe results show that on a low-risk level, if LSI increases the degree of punishment, it will fail to enhance FLSP's operational activeness in the long term; when the risk rises to an intermediate level, a circular game occurs between LSI and FLSP; and on a high level of risk, FLSP will actively take actions, and its functional probability further impacts LSI's strategic choices. Finally, this paper analyzes the moderating impact of punishment intensity and social reputation loss on the evolutionary model in emergencies and provides relevant managerial implications.Originality/valueFirst, by taking both interruption probability and emergencies into consideration, this paper explores the interactions among the factors relevant to LSI's and FLSP's optimal decision-making. Second, this paper analyzes the optimal evolutionary game strategies of LSI and FLSP with different interruption probability and the range of their optimal strategies. Third, the findings of this paper provide valuable implications for relevant practices, such that the punishment intensity and social reputation loss determine the optimal strategies of LSI and FLSP, and thus it is an effective vehicle for LSSC system administrator to achieve the maximum efficiency of the system.

Decision-Making on the Supply Chain of Fresh Agricultural Products with Two-Period Price and Option Contract

2020 ◽  
pp. 2050038
Author(s):  
Bo Yan ◽  
Gaodi Liu ◽  
Xiaohua Wu ◽  
Jiwen Wu
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Wholesale Price ◽  
Agricultural Products ◽  
Optimal Decision ◽  
Optimal Order ◽  
Agricultural Product ◽  
Fixed Cost ◽  
Option Contract ◽  
Decentralized Decision Making

The price risk of fresh agricultural products has been a significant topic in recent years. Taking the two-level fresh agricultural product supply chain as the research object, this paper studies the optimal ordering and coordination of supply chain based on two-period price, wholesale price and option contract. The optimal order decision of the retailer at the single period price and the optimal decision corresponding to the supplier are obtained when the output of the supplier is uncertain under decentralized decision-making. The range of penalty cost parameter that avoids supplier default is also obtained. The effect of two-period price on the optimal order decision and supply chain profits is discussed when the production yield of the supplier is fixed. Cost-sharing contract is introduced to increase the order quantity and achieve coordination because the option contract cannot completely make the supply chain coordination with two-period price. This paper provides a low-cost approach that can be applied in fresh agricultural supply chain to solve financing and order problems.

scholarly journals The More Supply Chain Control Power, the Better? A Comparison among Four Kinds of Cooperation Models

2015 ◽  
Vol 2015 ◽  
pp. 1-19 ◽  
Author(s):  
Weihua Liu ◽  
Shuqing Wang ◽  
Donglei Zhu
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
The Other ◽  
Order Quantity ◽  
Control Power ◽  
Decentralized Decision Making ◽  
Optimal Value ◽  
Total Profit

This paper introduces the parameter of supply chain control power into existing supply chain coordination models and explores the impacts of control power on the profits of manufacturer, retailer, and the overall supply chain under four modes of decision-making, including the decentralized decision-making dominated by manufacturer, the decentralized decision-making dominated by retailer, centralized decision-making, and Nash negotiation decision-making. Some significant conclusions are obtained. Firstly, supply chain control power does have great impact on the supply chain profits. The profit of the whole supply chain with centralized decision-making is higher than those of the other three modes, while the overall profit of supply chain with decentralized decision-making is superior to the profit when retailer and manufacturer dominate the supply chain together. Secondly, with decentralized decision-making, for manufacturer and retailer, it is beneficial to gain the control powers of the supply chain; however, control power has an optimal value, not the bigger, the better. Thirdly, under certain circumstances, order quantity will increase and the wholesale price will decrease when control power is transferred from manufacturer to retailer. In this case, the total profit of supply chain dominated by retailer will be greater than that dominated by manufacturer.

scholarly journals Significance of multi-objective optimization in logistics problem for multi-product supply chain network under the intuitionistic fuzzy environment

2021 ◽  
Author(s):  
Srikant Gupta ◽  
Ahteshamul Haq ◽  
Irfan Ali ◽  
Biswajit Sarkar
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Real Life ◽  
Decision Makers ◽  
Supply Chain Network ◽  
Multi Objective ◽  
Intuitionistic Fuzzy ◽  
Fuzzy Environment ◽  
Hierarchical Decision

AbstractDetermining the methods for fulfilling the continuously increasing customer expectations and maintaining competitiveness in the market while limiting controllable expenses is challenging. Our study thus identifies inefficiencies in the supply chain network (SCN). The initial goal is to obtain the best allocation order for products from various sources with different destinations in an optimal manner. This study considers two types of decision-makers (DMs) operating at two separate groups of SCN, that is, a bi-level decision-making process. The first-level DM moves first and determines the amounts of the quantity transported to distributors, and the second-level DM then rationally chooses their amounts. First-level decision-makers (FLDMs) aimed at minimizing the total costs of transportation, while second-level decision-makers (SLDM) attempt to simultaneously minimize the total delivery time of the SCN and balance the allocation order between various sources and destinations. This investigation implements fuzzy goal programming (FGP) to solve the multi-objective of SCN in an intuitionistic fuzzy environment. The FGP concept was used to define the fuzzy goals, build linear and nonlinear membership functions, and achieve the compromise solution. A real-life case study was used to illustrate the proposed work. The obtained result shows the optimal quantities transported from the various sources to the various destinations that could enable managers to detect the optimum quantity of the product when hierarchical decision-making involving two levels. A case study then illustrates the application of the proposed work.

scholarly journals Supply chain contracting coordination for fresh products with fresh-keeping effort

2017 ◽  
Vol 117 (3) ◽  
pp. 538-559 ◽  
Author(s):  
Qi Zheng ◽  
Petros Ieromonachou ◽  
Tijun Fan ◽  
Li Zhou
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Optimal Decision ◽  
Decision Variable ◽  
Coordination Problem ◽  
Content Type ◽  
Revenue Sharing Contract ◽  
Decentralized Decision Making

Purpose Fresh product loss rates in supply chain operations are particularly high due to the nature of perishable products. The purpose of this paper is to maximize profit through the contract between retailer and supplier. The optimized prices for the retailer and the supplier, taking the fresh-keeping effort into consideration, are derived. Design/methodology/approach To address this issue, the authors consider a two-echelon supply chain consisting of a retailer and a supplier (i.e. wholesaler) for two scenarios: centralized and decentralized decision making. The authors start from investigating the optimal decision in the centralized supply chain and then comparing the results with those of the decentralized decision. Meanwhile, a fresh-keeping cost-sharing contract and a fresh-keeping cost- and revenue-sharing contract are designed. Numerical examples are provided, and managerial insights are discussed at the end. Findings The results show that the centralized decision is more profitable than the decentralized decision; a fresh product supply chain (FPSC) can only be coordinated through a fresh-keeping cost- and revenue-sharing contract; the optimal retail price, wholesale price and fresh-keeping effort can all be achieved; and the profit of a FPSC is positively related to consumers’ sensitivity to freshness and negatively correlated with their sensitivity to price. Research limitations/implications This research is based on the assumption that demand is relatively stable. It has not addressed when demand is stochastic. Practical implications The findings would be useful for managers in fresh food sector in terms of how to deal with suppliers in order to maximize total profit while also provide freshest food to the customers. Originality/value Few studies have considered fresh-keeping effort as a decision variable in the modelling of supply chain. In this paper, a mathematical model for the fresh-keeping effort and for price decisions in a supply chain is developed. In particular, fresh-keeping cost-sharing contract and revenue-sharing contract are examined simultaneously in the study of the supply chain coordination problem.

scholarly journals Customer Knowledge Enabled Innovation: Analyzing Pricing-Promotion Coordination Mechanism

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-11
Author(s):  
Guanbing Zhao ◽  
Yangyang Qiu ◽  
Muhammad Imran ◽  
Fazal Manan
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Repeated Game ◽  
Consumer Electronics ◽  
Coordination Mechanism ◽  
Optimal Decision ◽  
Consumer Electronic ◽  
Market Launch ◽  
Optimal Decision Making ◽  
New Consumer

Pricing and promotion are two important decisions during the market launch of new consumer electronics products. Nowadays, the pricing and promotion of consumer electronic products are often not made separately but at the same time. This study focuses on the pricing-promotion coordination mechanism of a secondary supply chain of new consumer electronics products (which consists of a manufacturer and a seller). Price and the degree of promotion together affect the demand for products. Manufacturers give sellers a sales target. Manufacturers and sellers set prices and promotions separately, introduce repurchase penalty joint contracts, and establish supply chain profit models to compare and analyze optimal pricing, promotion efforts, and maximum profit of supply chains under different decision-making situations. We prove that the repurchase penalty joint contract can coordinate the supply chain under the assumptions of a single-period game and a multiperiod repeated game. The results show that under the repurchase penalty joint contract, when manufacturers and sellers choose high prices and high promotions at the same time, the supply chain of new consumer electronics products has the largest profit. Finally, numerical experiments are conducted to study the influence of parameters on optimal decision-making and supply chain profits.

scholarly journals Emergency Strategies of Closed-Loop Supply Chain with Single Retailer Recycling under Demand Disruptions

2020 ◽  
Vol 2020 ◽  
pp. 1-19
Author(s):  
Jian Cao ◽  
Yuting Yan ◽  
Lingyuan Wang ◽  
Xihui Chen ◽  
Xuemei Zhang ◽  
...  
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Closed Loop ◽  
Wholesale Price ◽  
Normal Operation ◽  
Market Demand ◽  
Closed Loop Supply Chain ◽  
Decentralized Decision Making ◽  
Retail Prices ◽  
Emergency Decision

The uncertainty caused by emergencies will influence the normal operation of the supply chain. Considering demand disruptions, a closed-loop supply chain consisting of one manufacturer and two competing retailers based on decentralized decision-making is considered. In the supply chain, one retailer recovers end-of-life products while the other does not. Analytic results show that, when the disturbance of demand occurs, the manufacturer and retailers adjust the wholesale price and retail prices of products according to the direction of the market demand disruptions. Under demand disruptions, the retailer who participates in recovering can gain more profits, especially in the case of the positive disruption. Theoretic and pragmatic references for the emergency decision-making of closed-loop supply chain enterprises are provided.

scholarly journals Optimal Product Quality of Supply Chain Based on Information Traceability in Fashion and Textiles Industry: An Adverse Logistics Perspective

2013 ◽  
Vol 2013 ◽  
pp. 1-13 ◽  
Author(s):  
Zhaolin Cheng ◽  
Jinghua Xiao ◽  
Kang Xie ◽  
Xiaoli Huang
Keyword(s):  
Quality Control ◽  
Supply Chain ◽  
Product Quality ◽  
Control Method ◽  
Optimal Decision ◽  
Control Methods ◽  
Control Cost ◽  
Related Cost ◽  
Optimal Decision Making ◽  
The One

This paper investigates and compares two quality control methods, that is, inspection control and traceability control, to optimize supply chain quality in fashion and textiles industry. The objective is to maximize the supply chain participants’ expected profits and to achieve a Pareto improvement of supply chain product quality. Withqualityas a controllable variable indicating the level of opportunistic behavior, thereturnis interpreted as a function ofquality: the higher the quality, the lower the return. Taking into account bothqualityandinventory quantity, we propose and compare the optimal decision-making models for three control methods of supply chain, respectively: decentralized (no control), inspection, and traceability. Further, we use a numerical example to illustrate the relationships amongquality,profits,andquality-control costcoefficients (i.e., inspection-related cost and traceability-related cost). We then analyze and discuss the differences in the applications and scopes of the two control methods. On the one hand, given the poor standardization of fashion and textiles industry in the current practice (especially in China market), the cost of sampling inspection is relatively lower as compared to that of the traceability control method. On the other hand, with the improved industrial standardization and technology, traceability control tends to gain increasing advantages in cost and popularity.

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