scholarly journals Optimal Order Policies for Dual-Sourcing Supply Chains under Random Supply Disruption

2019 ◽  
Vol 11 (3) ◽  
pp. 698 ◽  
Author(s):  
Rongfang Yan ◽  
Dejun Kou ◽  
Bin Lu
Keyword(s):  
Supply Chain ◽  
Service Level ◽  
Optimal Order ◽  
Order Quantity ◽  
Dual Sourcing ◽  
Closed Form Solutions ◽  
Optimal Decisions ◽  
Optimal Order Quantity ◽  
Constrained Model ◽  
Disruption Time

In this paper, we investigate inventory and order strategies of a two-echelon supply chain, which is composed of two unreliable suppliers that are subject to random disruption. We develop the gross weighted profit benchmark model and the service level constrained model of the supply chain, respectively. We derive the retailer’s optimal order quantity and analyze the retailer’ optimal order policy and also obtain the analytical closed-form solutions. In addition, some numerical examples are provided to illustrate the effect of disruption time, disruption probability and fill rate on the optimal decisions and expected profit.

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.

scholarly journals Coordination of Supply Chain with One Supplier and Two Competing Risk-Averse Retailers under an Option Contract

2016 ◽  
Vol 2016 ◽  
pp. 1-11 ◽  
Author(s):  
Rui Wang ◽  
Shiji Song ◽  
Cheng Wu
Keyword(s):  
Supply Chain ◽  
Conditional Value At Risk ◽  
Optimal Order ◽  
Pareto Optimum ◽  
Risk Averse ◽  
Order Quantity ◽  
Supply Chain System ◽  
Chain System ◽  
Option Contract ◽  
Optimal Order Quantity

This paper studies an option contract for coordinating a supply chain comprising one risk-neutral supplier and two risk-averse retailers engaged in promotion competition in the selling season. For a given option contract, in decentralized case, each risk-averse retailer decides the optimal order quantity and the promotion policy by maximizing the conditional value-at-risk of profit. Based on the retailers’ decision, the supplier derives the optimal production policy by maximizing expected profit. In centralized case, the optimal decision of the supply chain system is obtained. Based on the decentralized and centralized decision, we find the coordination conditions of the supply chain system, which can optimize the supply chain system profit and make the profits of the supply chain members achieve Pareto optimum. As for the subchain, we also find the coordination conditions, which generalize the results of the supply chain with one supplier and one retailer. Our analysis and numerical experiments show that there exists a unique Nash equilibrium between two retailers, and the optimal order quantity of each retailer increases (decreases) with its own (competitor’s) promotion level.

scholarly journals Trade Credit with Barter in a Capital-Constrained Supply Chain

2021 ◽  
Vol 13 (20) ◽  
pp. 11361
Author(s):  
Yangyang Huang ◽  
Zhenyang Pi ◽  
Weiguo Fang
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
Wholesale Price ◽  
Uncertain Demand ◽  
Equilibrium Strategy ◽  
Optimal Order ◽  
Order Quantity ◽  
Supply Rate ◽  
Optimal Order Quantity ◽  
And Performance

Barter has emerged to alleviate capital pressure, maximize the circulation of goods, and facilitate the disposal of excess inventory. This study considers a two-level supply chain consisting of a manufacturer and a capital-constrained retailer with trade credit, in which the retailer exchanges unsold products for needed subsidiary products on a barter platform. The retailer’s optimal order quantity and the manufacturer’s wholesale price are derived, and the influences of barter and other factors on the equilibrium strategy and performance of the supply chain are examined; these results are verified and supplemented by numerical simulation. We find that the retailer can increase profit by bartering when facing highly uncertain demand, that the retailer’s optimal order quantity increases with the supply rate and demand for subsidiary products, and that both manufacturer and retailer benefit from the high supply rate of subsidiary products. However, barter induces the manufacturer to raise the wholesale price to prevent its profit from being harmed. In addition, the manufacturer suffers from the retailer’s initial capital.

scholarly journals Optimal Decision of Deferred Payment Supply Chain considering Bilateral Risk-Aversion Degree

2018 ◽  
Vol 2018 ◽  
pp. 1-11 ◽  
Author(s):  
Liu Liang ◽  
Li Futou
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Wholesale Price ◽  
Conditional Value At Risk ◽  
Optimal Order ◽  
Risk Averse ◽  
Order Quantity ◽  
Initial Capital ◽  
Optimal Order Quantity ◽  
Degree Of Risk

This paper aims to fill up the gap that the previous research has never explored, the deferred payment supply chain with a risk-averse supplier. To this end, the conditional value-at-risk (CVaR) was adopted as a criterion to measure the influence of retailer’s deferred payment on supply chain performance. According to this criterion, the retailer’s optimal order quantity and the supplier’s optimal wholesale price per unit product were investigated under decentralized decision-making. Then, the existence of a unique optimal strategy was discussed for risk-averse supplier and retailer, and the values of risk-averse, initial capital, and wholesale price were calculated in detail. Finally, the theoretical results were testified through a numerical example. It is concluded that retailer’s optimal order quantity is negatively correlated with the wholesale price, initial capital, and degree of risk aversion, so that the retailer can benefit through proper risk aversion; the supplier’s expected profit decreases with the increase in the degree of risk aversion, yet the optimal wholesale price is determined by the degree of risk aversion of supplier and retailer. The research findings shed valuable new light on how to manage a supply chain involving risk-averse supplier and retailer.

An optimal order quantity with shelf-refill trips from backroom for efficient store operations

2016 ◽  
Vol 11 (4) ◽  
pp. 967-984
Author(s):  
Anukal Chiralaksanakul ◽  
Vatcharapol Sukhotu
Keyword(s):  
Supply Chain ◽  
Optimal Order ◽  
Type Model ◽  
Order Quantity ◽  
Shelf Space ◽  
Content Type ◽  
Cost Impact ◽  
Optimal Order Quantity ◽  
The Cost ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of backroom storage in supply chain replenishment decision parameters: the order quantity based on the well-established economic order quantity (EOQ) model. Design/methodology/approach The authors develop an EOQ-type model to investigate the operational cost impact of the order quantity with backroom storage. Because of the discrete and discontinuous nature of the problem, a modification of an existing algorithm is applied to obtain an optimal order quantity. Numerical experiments derived from a leading retailer in Thailand are used to study the cost impact of the backroom. Findings The paper shows that the backroom storage will significantly affect the decision regarding the order quantity. If its effect is ignored, the cost increase can be as high as 30 per cent. The costs and operations of additional shelf-refill trips from the backroom must be carefully analyzed and included in the decisions of replenishment operations. Research limitations/implications The model is a simplified version of the actual replenishment process. Validation from a real-world setting should be used to confirm the results. There are many additional opportunities to further integrate other issues in this problem such as shelf space decisions or joint order quantity between vendors and retailers. Practical implications The insights gained from the model will help managers, both retailers and vendors or manufacturers, make better decisions with regard to the order quantity policy in the supply chain. Originality/value Problems with backroom storage have been qualitatively described in the literature in the past decade. This paper is an early attempt to develop a quantitative model to analytically study the cost impact of backroom on order quantity decisions.

Coordination model of supply chain based on deciders’ risk attitudes in a fuzzy decision environment

2021 ◽  
Vol 40 (1) ◽  
pp. 27-41
Author(s):  
Jingjing Wang ◽  
Minli Xu ◽  
Huiyun Jian
Keyword(s):  
Supply Chain ◽  
Fuzzy Numbers ◽  
Optimal Order ◽  
Risk Attitudes ◽  
Order Quantity ◽  
Two Stage ◽  
Quantity Discount ◽  
Risk Seeking ◽  
Proposed Model ◽  
Optimal Order Quantity

This paper considers a two-stage supply chain consisting of one manufacturer and one retailer, exploring the impact of the fuzzy uncertainty of product yield and demand and the deciders’ risk attitudes on the optimal order quantity of the retailer. At the same time, this study tries to analyze the coordination problem in the two-stage supply chain with consideration of the retailer and the manufacturer’s risk attitudes. Firstly, this study develops a supply chain optimal decision model in a centralized decision framework. In the proposed model, the L-R fuzzy numbers are used to depict the yield and demand with fuzzy characteristics. Then, the coordination of quantity discount in a supply chain is studied. Consequently, this research further investigates a special case in which the market demand and yield are assumed to be triangular fuzzy numbers, and the optimal solution of the order quantity and the wholesale price are obtained. At last, this paper utilizes several numerical examples to validate the proposed model. The results show that the quantity discount contract can coordinate the supply chain in a fuzzy environment, and the optimal order quantity decreases with the increasing of the risk bias coefficient of the retailer and the manufacturer. It also suggests that risk-seeking retailer will order more products, in addition, the manufacturer tend to choose a risk-seeking retailer as partner and the retailer is more likely to choose a risk-seeking rather than risk-aversion manufacturer as partner.

scholarly journals Research on Two-Level Price-Fluctuation Supply Chain Ordering Strategy Problem

2020 ◽  
Vol 2020 ◽  
pp. 1-14
Author(s):  
Minchao Zheng ◽  
Zhiqing Meng ◽  
Rui Shen
Keyword(s):  
Supply Chain ◽  
Bilevel Programming ◽  
Programming Model ◽  
Copula Function ◽  
Optimal Order ◽  
Order Quantity ◽  
Price Fluctuation ◽  
Optimal Order Quantity ◽  
Bilevel Programming Model ◽  
Chain Ordering

Uncertainties from retail price-fluctuation sales as well as constraints from suppliers make it difficult for retailers to place accurate orders, which have a great impact on the whole supply chain. Thus, this paper studies a supply chain ordering problem for two-level price-fluctuation sales and establishes a bilevel programming model by Copula function measuring the correlation between price and demand. The optimal order quantity is derived by transforming the bilevel programming model into a single-level model. An algorithm is given for solving the approximate optimal order quantity for the discrete model, and the convergence of the algorithm is proved. The results show that the approximate optimal order quantity decreases with the increase in the uncertainties of price and demand. Supply chain members should sell more products at the normal level, thereby increasing profits of each member in the supply chain under two-level price-fluctuation sales.

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 The analysis of bullwhip effect in supply chain based on hedging strategy compared with optimal order quantity strategy

2021 ◽  
Vol 0 (0) ◽  
pp. 0-0
Author(s):  
Kosar Akhavan Chayjan ◽  
Masoud Rabbani ◽  
Jafar Razmi ◽  
Mohamad Sadegh Sangari
Keyword(s):  
Supply Chain ◽  
Bullwhip Effect ◽  
Optimal Order ◽  
Order Quantity ◽  
Hedging Strategy ◽  
Optimal Order Quantity
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