Procurement Mechanism Design In A Two Echelon Inventory System With Price Sensitive Demand
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Procurement Mechanism Design In A Two Echelon Inventory System With Price Sensitive Demand
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Author : Fuqiang Zhang
language : en
Publisher:
Release Date : 2010
Procurement Mechanism Design In A Two Echelon Inventory System With Price Sensitive Demand written by Fuqiang Zhang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
This paper studies a buyer's procurement strategies in a two-stage supply chain with price-sensitive demand. The buyer procures a product from a supplier and then sells to the marketplace. Market demand is stochastic and depends on the buyer's selling price. The supplier's production cost is private information, and the buyer only knows the distribution of the cost. Both the buyer and the supplier can hold inventories to improve service, and a periodic review inventory system is considered. The buyer takes two attributes into consideration when designing the procurement mechanism: quantity attribute (i.e., the total purchase quantity) and service-level attribute (i.e., the supplier's delivery performance). We first identify the optimal procurement mechanism for the buyer, which consists of a nonlinear menu of contracts for each of the two attributes. It can be shown that the optimal mechanism induces both a lower market demand and a lower service level compared to the supply chain optimum. In view of the complexity of the optimal mechanism, we proceed to search for simpler mechanisms that perform well for the buyer. We find that the above two attributes have different implications for procurement mechanism design: The value of using complex contract terms is generally negligible for the service-level attribute, while it can be highly valuable for the quantity attribute. In particular, we demonstrate that a fixed service-level contract, which consists of a target service level and a price-quantity menu, yields nearly optimal profit for the buyer. Additionally, the price-quantity menu is essentially a quantity discount scheme widely observed in practice.
Supply Chain Disruptions
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Author : Haresh Gurnani
language : en
Publisher: Springer Science & Business Media
Release Date : 2011-09-28
Supply Chain Disruptions written by Haresh Gurnani and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-09-28 with Technology & Engineering categories.
One of the most critical issues facing supply chain managers in today’s globalized and highly uncertain business environments is how to deal proactively with disruptions that might affect the complicated supply networks characterizing modern enterprises. Supply Chain Disruptions: Theory and Practice of Managing Risk presents a state-of the-art perspective on this particular issue. Supply Chain Disruptions: Theory and Practice of Managing Risk demonstrates that effective management of supply disruptions necessitates both strategic and tactical measures – the former involving optimal design of supply networks; the latter involving inventory, finance and demand management. It shows that managers ought to use all available levers at their disposal throughout the supply network – like sourcing and pricing strategies, providing financial subsidies, encouraging information sharing and incentive alignment between supply chain partners – in order to tackle supply disruptions. The editors combine up-to-date academic research with the latest operational risk management practices used in industry to demonstrate how theoreticians and practitioners can learn from each other. As well as providing a wealth of knowledge for students and professors who are interested in pursuing research or teaching courses in the rapidly growing area of supply chain risk management, Supply Chain Disruptions: Theory and Practice of Managing Risk also acts as a ready reference for practitioners who are interested in understanding the theoretical underpinnings of effective supply disruption management techniques.
Issues In Technology Theory Research And Application 2011 Edition
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Author :
language : en
Publisher: ScholarlyEditions
Release Date : 2012-01-09
Issues In Technology Theory Research And Application 2011 Edition written by and has been published by ScholarlyEditions this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-01-09 with Technology & Engineering categories.
Issues in Technology Theory, Research, and Application: 2011 Edition is a ScholarlyEditions™ eBook that delivers timely, authoritative, and comprehensive information about Technology Theory, Research, and Application. The editors have built Issues in Technology Theory, Research, and Application: 2011 Edition on the vast information databases of ScholarlyNews.™ You can expect the information about Technology Theory, Research, and Application in this eBook to be deeper than what you can access anywhere else, as well as consistently reliable, authoritative, informed, and relevant. The content of Issues in Technology Theory, Research, and Application: 2011 Edition has been produced by the world’s leading scientists, engineers, analysts, research institutions, and companies. All of the content is from peer-reviewed sources, and all of it is written, assembled, and edited by the editors at ScholarlyEditions™ and available exclusively from us. You now have a source you can cite with authority, confidence, and credibility. More information is available at http://www.ScholarlyEditions.com/.
Handbook Of Information Exchange In Supply Chain Management
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Author : Albert Y. Ha
language : en
Publisher: Springer
Release Date : 2016-10-03
Handbook Of Information Exchange In Supply Chain Management written by Albert Y. Ha and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-10-03 with Business & Economics categories.
Sharing accurate and timely supply and demand information throughout a supply chain can yield significant performance improvements to all members of the supply chain. Despite the benefits, many firms are reluctant to share information with their supply chain partners due to an unequal distribution of risks, costs, and benefits among the partners. Thus, incentive mechanisms must be in place to induce communication, cooperation, and collaboration among all members of a supply chain. The issue of Information exchange/sharing has been examined by various researchers over the last 15-20 years. However, there is no research book that compiles various approaches, analyses, key implications, as well as future development of this area. This book will serve as a handbook for researchers who are interested in learning the state of the art of the line of research in this area and explore open research topics in this area. Contributors, all leading researchers, have committed to delivering 18 chapters, broken into four distinct sections covering the Value of Information Sharing, Contracting and Information, Information Signaling, and Incentives for Information Sharing.
Coordination Under Unknown Demand Distribution
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Author : Shi Chen
language : en
Publisher:
Release Date : 2023
Coordination Under Unknown Demand Distribution written by Shi Chen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with categories.
In the literature on supply chain management (SCM), the multi-echelon stochastic inventory models with known demand distributions have played a fundamental role for developing firms' collaborative strategies, including the optimal policy to maximize efficiency of the centralized supply chain (the ``first-best” policy) and contract design in the decentralized supply chain such that the self-interested parties are incentivized to adopt the first-best policy (supply chain is ``coordinated"). In this work, we extend the classic two-echelon inventory problem to an online setting with an unknown demand distribution and then re-examine the optimal inventory control and supply chain coordination problems. The new setting brings two novel challenges. (1) Since the upstream firm only observes orders from the downstream firm, it does not necessarily receive the true demand information, which is aggravated by the online setting as the downstream firm may experiment with different policies facing the unknown demand distribution. (2) The above issue is compounded by the complex inventory interactions due to the multi-echelon nature of the system, as the downstream firm's inventory level can be impacted by the upstream firm's shortages. For the centralized system, we design algorithms based on Online Newton Step with the low-switching (``lazy-update”) property to achieve convergence to the first-best policy. For the decentralized system, our algorithms, together with a protocol for learning the optimal contract parameter value, also achieve favorable guarantees for individual regret and convergence to the first-best decisions such that the supply chain is coordinated.
Supply Chain Sustainability And Raw Material Management Concepts And Processes
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Author : Farahani, Reza Zanjirani
language : en
Publisher: IGI Global
Release Date : 2011-12-31
Supply Chain Sustainability And Raw Material Management Concepts And Processes written by Farahani, Reza Zanjirani and has been published by IGI Global this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-12-31 with Business & Economics categories.
Many organizations find supply chain management an essential prerequisite to building a sustainable competitive edge for their services or products. While interest in SCM is enormous, lack of theoretical frameworks and real world applications often characterizes research in the field, and effective management of the supply chain remains elusive. Supply Chain Sustainability and Raw Material Management: Concepts and Processes is a comprehensive and up-to-date resource for operations researchers, management scientists, industrial engineers, and other business practitioners and specialists looking for systemic and advanced discussions of supply chain management. By presenting qualitative concepts, quantitative models, and case studies, this book is a coherent guide to creating long-term and sustainable performance for organizations who want to compete in the global market.
Coordinated Supplier Selection Inventory Replenishment And Pricing Decisions In Supply Chain Management
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Author : Lisha Duan
language : en
Publisher:
Release Date : 2018
Coordinated Supplier Selection Inventory Replenishment And Pricing Decisions In Supply Chain Management written by Lisha Duan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
Given the popularity of inventory models with supplier selection, this research aims to develop mathematical models for the integrated procurement, inventory planning, and pricing problems in the presence of multiple capacitated suppliers and price-sensitive demand in supply chains, simultaneously determining the selling pricing and inventory policy under a variety of supply contracts. We starts with the development of an operational planning model in a demand-driven serial supply chain with multiple capacitated suppliers. Taking into account delivery time and order frequency, the suppliers offer a novel price break scheme, which is beneficial to both the supplier and the buyer. A mixed-integer linear programming (MILP) formulation is developed to address this dynamic supplier selection and inventory management model aiming at minimizing the overall incurred cost across the entire supply chain with capacity constraints in production, inventory, and transportation. Then, the length of the time period is considered as a variable. A new MILP formulation is derived when each period of the model is split into multiple sub-periods, and under certain conditions, it is proved that the optimal solution and objective value of the original model form a feasible solution and an upper bound for the derived model. Sufficient evidence demonstrates that the length of the time period has a significant influence on supplier selection, lot sizing allocation, and inventory planning decisions. Then, we investigate joint decision making of supplier selection, pricing, and inventory lot-sizing in a two-stage supply chain, where suppliers feature certain capacity and quality levels and the retailer faces a price-sensitive demand, characterized by the logit function. Multiple orders can be placed to potential suppliers within a repeating order cycle. The retailer purchases the items satisfying a lower bound on the average quality level to meet customer demand. In this context, we develop a mathematical model to find an optimal solution for the selling price and inventory replenishment policy, including the set of selected suppliers, order frequency, and order quantity. We further derive a lower bound on the optimal retail price and based on a two-stage piecewise linear approximation (PLA) technique, we develop heuristic algorithms to yield near-optimal solutions to the proposed model. Besides, we provide sufficient justification for the selection of the logit demand function as well as a comparison with other demand functions. A numerical study further suggests the importance of using a precise demand curve to select the set of suppliers, coordinate inventory, and accurately optimize the profit function. Next, we extend the joint pricing, supplier selection and inventory replenishment model to a serial supply chain with multiple stages in a centralized control scenario. Within this supply chain, the first stage faces a supplier selection decision for a particular product that experiences a price-sensitive demand. The buying stage needs to decide which suppliers to choose and how to allocate orders, determining the optimal inventory policy for all stages and the retail price to offer to end customers, while maximizing the total profit of the supply chain. The problem is formulated as a mixed integer nonlinear programming (MINLP) model and a heuristic algorithm is proposed to overcome the complexity of the model. Then, we analyze a special case that considers only one uncapacitated supplier and one buyer. An efficient heuristic is developed and computational experiments are carried out to examine the performance of the proposed heuristics. In addition, we provide a series of numerical examples to illustrate our results and analyze the impact of the parameters within a sensitivity analysis. Finally, we study a pricing and purchasing problem in a two-stage supply chain with one supplier and one retailer, where the retailer faces the price-sensitive demand and the supplier coordinates the supply chain with controllable delivery deviation. Both the retailers demand and the suppliers lead time are stochastic. A risk sharing supply contract is adopted and the supplier compensates the retailer by paying a portion of penalties for early/late delivery. In this direction, we establish a model with a game-theoretic approach to achieve supply chain coordination, simultaneously determining the retailers selling price, order quantity, and order date as well as the suppliers lead time variance. Besides, the models with respect to the constant delivery deviation are also developed and analyzed. Finally, a numerical example is presented and sensitivity analysis regarding the pricing and penalty parameters provide in-depth managerial insights for decision makers.
An Analysis Of A Single Item Inventory System With Returns The Multi Echelon Case
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Author : John A. Muckstadt
language : en
Publisher:
Release Date : 1979
An Analysis Of A Single Item Inventory System With Returns The Multi Echelon Case written by John A. Muckstadt and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1979 with categories.
We consider the inventory control of a single item in a two echelon system in which a warehouse (the upper echelon) supports N(N> or = 1) retailers (the lower echelon). Customers return units in a repairable state as well as demand units in a serviceable state at the retailer level only. The return and demand processes are assumed to be mutually independent. The stationary return rate is assumed to be less than the stationary demand rate at each location so that occasional outside procurements are necessary. The objectives of this paper are to develop a cost model of this system given that each location follows a continuous review procurement policy, and to incorporate the single item, single location solution method into an iterative algorithm which determines the policy parameter values at each location.
Pooled Versus Reserved Inventory Policies In A Two Echelon Supply Chain
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Author :
language : en
Publisher:
Release Date : 2004
Pooled Versus Reserved Inventory Policies In A Two Echelon Supply Chain written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with categories.
We consider a two-echelon supply chain with two retailers and one supplier. The retailers order from the supplier who makes all the decisions and bears all the inventory risk. Throughout this dissertation, we consider two different inventory systems: areserved inventory system and a pooled inventory system. With the reserved inventory system, the supplier keeps separate inventories for each retailer. In contrast, the pooled inventory is shared by the two retailers, and the supplier makes the inventory decision based on the joint demand. First, assuming a fixed wholesale price, we analyze the supplier's decisions in the reserved and the pooled inventory systems. We compare the profit of the supplier and retailers in the two systems under normally distributed demands. We also analyze the scenarios in which the retailers have service level requirements. We find that regardless of whether retailers have service level requirements, under the normally distributed demands, the profits of the supplier and retailers all increase after pooling inventory. Then, we analyze the scenarios in which the wholesale prices are supplier's decision variables and demand is a function of the wholesale price. We analyze both the additive and multiplicative demands models. We again analyze the supplier's decision on the inventory levels and wholesale price with and without service level requirements. We also compare the profits of the retailers and supplier for the different policies under normally distributed demands. We find that the supplier's profit always increases after pooling the inventory while the retailers's profit may increase or decrease, depending on the system parameters. This thesis first studies the single period model, and then extends the results to finite and infinite horizon problem with either backlogging or lost sales assumptions. We give mathematical analysis of the pooled and the reserved inventory systems for the infinite horizon case and use simulation methods to.
Sustainable Logistics And Production In Industry 4 0
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Author : Katarzyna Grzybowska
language : en
Publisher: Springer Nature
Release Date : 2019-11-30
Sustainable Logistics And Production In Industry 4 0 written by Katarzyna Grzybowska and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-11-30 with Technology & Engineering categories.
This book proposes essential methods, models, and case studies for Sustainable Logistics and Production in Industry 4.0. In addition to identifying and discussing various challenges and future prospects, it also features numerous case studies and quantitative research from different sectors. The authors (which include academics and managers) present insightful tips on the technical, organizational and social aspects of implementing Sustainable Logistics and Production in Industry 4.0. In today’s world, changes are coming faster and more unpredictably. Production is becoming more automated, computerized and complex. In short, Industry 4.0 is creating many new opportunities, but at the same time several new challenges. This book offers a valuable resource for all academics and practitioners who want to deepen their knowledge of Sustainable Logistics and Production in Industry 4.0.