Green Supply Chain Newsvendor Model and Analysis under Multiplicative Random Demand

In this paper, we investigate the performance of green supply chain newsvendor model under multiplicative random demand. In our model, the green supply chain consists of one manufacturer and one retailer. The manufacturer acts as a leader, which decides the variables: production quantity, wholesale price and green-level; the retailer acts as a follower, decides on the retail price. Centralized and decentralized optimal solutions are obtained to optimize the manufacturer's production, stocking and green-level decision while anticipating the retailer's price optimization decision. Through research, it is found that the stocking factor decreases with the increasing price elasticity and is not affected by the green-level elasticity; Lower price elasticity will increase the optimal selling price of the green product, while green-level elasticity has no effect on the price; Larger price elasticity or green-level elasticity will increase the optimal green-level of the green product; Lower price elasticity or higher green-level elasticity will increase the overall profitability of the supply chain; Profit sharing between manufacturer and retailer under the decentralized model only depends on price elasticity and green-level elasticity; The greater price elasticity, the more beneficial to the retailer, the greater the green-level, the more beneficial to the manufacturer.

Optimal Production Decisions of Green Supply Chain Under Random Demand in Production Manufacturing

To investigate supply chain’s performance in production manufacturing industry, we establish a green one under random demand containing two members.In the channel, production quantity, wholesale price, and green-level are decided by the manufacturer. Retail price is decidedby theretailer. It showshow the parameters, such as the market potential, consumers' preference for green products, production cost and the green investment parameter, influence the performance of the production, pricing decision, whole channel's profit. We find that: (1) When the two members work as a team, green-level will increase, and this will also promote sustainable development of green production;(2) In the face of random demand, improvements in the manufacturer's green production technology, increased promotion of green products by the retailer, and enhanced green preferences of consumers are all conductive to improve channel's total profit.

A multi-period risk sharing supply chain contract under consideration of price and demand uncertainties

Exchange rate is extremely volatile and displays a Markovian regime switching property. This report proposes a multi-period procurement problem with a flexible quantity risk-sharing supply contract that may provide a prevention against exchange rate (FX) fluctuations for international traders. The buyer assumed to be encountered with a random price modelled by a regime-switching geometric Brownian motion and also random demand. The proposed risk sharing supply contract model helps to compensate supplier for the depreciating market price and also helps buyer when purchase price increases. According to the author’s knowledge, none of the studies in the literature considers a risk-sharing supply contract with random demand and random price while modelling the exchange rates by regime switching approach. Multi-period lattice model is developed for valuation of risk-sharing supply contract. The problem is solved with using dynamic programming approach. A numerical example and sensitivity analyses are presented to illustrate the proposed model.

A multi-period risk sharing supply chain contract under consideration of price and demand uncertainties

Exchange rate is extremely volatile and displays a Markovian regime switching property. This report proposes a multi-period procurement problem with a flexible quantity risk-sharing supply contract that may provide a prevention against exchange rate (FX) fluctuations for international traders. The buyer assumed to be encountered with a random price modelled by a regime-switching geometric Brownian motion and also random demand. The proposed risk sharing supply contract model helps to compensate supplier for the depreciating market price and also helps buyer when purchase price increases. According to the author’s knowledge, none of the studies in the literature considers a risk-sharing supply contract with random demand and random price while modelling the exchange rates by regime switching approach. Multi-period lattice model is developed for valuation of risk-sharing supply contract. The problem is solved with using dynamic programming approach. A numerical example and sensitivity analyses are presented to illustrate the proposed model.