Supply Chain Inventory Models Considering Supplier Selection And Price Sensitive Demand
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Supply Chain Inventory Models Considering Supplier Selection And Price Sensitive Demand
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Author : Hamza Adeinat
language : en
Publisher:
Release Date : 2016
Supply Chain Inventory Models Considering Supplier Selection And Price Sensitive Demand written by Hamza Adeinat and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
The purpose of this research is to develop supply chain inventory models that simultaneously coordinate supplier selection and pricing decisions for a range of retailing situations. The selection of appropriate suppliers plays an important role in improving companies purchasing performance. Many researchers and firms have studied the supplier selection problem without taking into account the price-sensitive nature of the demand for certain products. A products selling price has a significant impact not only on a companys ability to attract consumers, but also on its strategic decisions on matters such as supplier selection that are taken at the upstream stages of the supply chain. In this dissertation, we start with the development of a new mathematical model for the supplier selection problem that refines and generalizes some of the existing models in the literature. We propose a mixed integer nonlinear programming (MINLP) model to find the optimal inventory replenishment policy for a particular type of raw material in a supply chain defined by a single manufacturer and multiple suppliers. Each supplier offers an all-unit quantity discount as an incentive mechanism. Multiple orders can be submitted to the selected suppliers within a repeating order cycle. We initially assume the demand rate to be constant. The model provides the optimal number of orders and corresponding order quantities for the selected suppliers such that the replenishment and inventory cost per time unit is minimized under suppliers capacity and quality constraints. Then, we extend the model to simultaneously find the optimal selling price and replenishment policy for a particular type of product in a supply chain defined by a single retailer and multiple potential suppliers. Hence, we replace the manufacturer with a retailer subject to a demand rate considered to be dependent on the selling price. We propose an MINLP model to find the optimal order frequency and corresponding order quantity allocated to each selected supplier, and the optimal demand rate and selling price such that the profit per time unit is maximized taking into consideration suppliers limitation on capacity and quality. In addition, we provide sufficient conditions under which there exists an optimal solution where the retailer only orders from one supplier. We also apply the KarushKuhnTucker conditions to investigate the impact of the suppliers capacity on the optimal sourcing strategy. The results show that there may exist a range of capacity values for the dominating supplier, where the retailers optimal sourcing strategy is to order from multiple suppliers without fully utilizing the dominating suppliers capacity.Next, we study the integrated pricing and supplier selection problem in a two-stage supply chain that comprises a manufacturer stage followed by a retailer stage, both controlled by a single decision-maker. The manufacturer can procure the required raw material from a list of potential suppliers, each of which has constraints in regard to capacity and quality. In this model, the manufacturer periodically replenishes the retailers inventory, the demand for which is proving to be price-sensitive. We propose an MINLP model designed to determine the optimal replenishment policy for the raw material, the optimal amount of inventory replenished at each stage, and the optimal final products selling price at which the profit per time unit is maximized. Additionally, we provide upper and lower bounds for the optimal selling price and for the manufacturers lot size multiplicative factor, which result in a tight feasible search space.Next, we propose an MINLP model to extend the prior model by considering a serial supply chain controlled by a decision-maker responsible for maximizing the profit per time unit by determining the following: the optimal amount of raw material to order from the selected suppliers, the optimal amount of product to transfer between consecutive stages in order to avoid any inventory shortage, and the optimal final products selling price. Coordinating all these decisions simultaneously is a topic that has been neglected in literature. In addition, our model requires the order quantity received from each selected supplier to be an integer multiple of the order quantity delivered to the following stage, which means that a different multiplicative factor can be assigned to each supplier. This coordination mechanism shows an improvement in the objective function compared to those of existing models that assign the same multiplicative factor to each selected supplier. Moreover, we develop a heuristic algorithm that generates near-optimal solutions. A numerical example is presented to illustrate the proposed model and the heuristic algorithm.
Optimization And Inventory Management
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Author : Nita H. Shah
language : en
Publisher: Springer Nature
Release Date : 2019-08-31
Optimization And Inventory Management written by Nita H. Shah and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-08-31 with Business & Economics categories.
This book discusses inventory models for determining optimal ordering policies using various optimization techniques, genetic algorithms, and data mining concepts. It also provides sensitivity analyses for the models’ robustness. It presents a collection of mathematical models that deal with real industry scenarios. All mathematical model solutions are provided with the help of various optimization techniques to determine optimal ordering policy. The book offers a range of perspectives on the implementation of optimization techniques, inflation, trade credit financing, fuzzy systems, human error, learning in production, inspection, green supply chains, closed supply chains, reworks, game theory approaches, genetic algorithms, and data mining, as well as research on big data applications for inventory management and control. Starting from deterministic inventory models, the book moves towards advanced inventory models. The content is divided into eight major sections: inventory control and management – inventory models with trade credit financing for imperfect quality items; environmental impact on ordering policies; impact of learning on the supply chain models; EOQ models considering warehousing; optimal ordering policies with data mining and PSO techniques; supply chain models in fuzzy environments; optimal production models for multi-items and multi-retailers; and a marketing model to understand buying behaviour. Given its scope, the book offers a valuable resource for practitioners, instructors, students and researchers alike. It also offers essential insights to help retailers/managers improve business functions and make more accurate and realistic decisions.
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.
A Dynamic Supply Chain Inventory Model Considering Supplier Selection Joint Replenishment And Transportation Cost
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Author : Chenxi Li
language : en
Publisher:
Release Date : 2015
A Dynamic Supply Chain Inventory Model Considering Supplier Selection Joint Replenishment And Transportation Cost written by Chenxi Li and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Companies currently face fierce global competition and so they must improve their supply chain efficiency. The development of appropriate decision support tools is important to enable such improvements. The thesis presents a multi-period inventory lot-sizing model for multiple products in a serial supply chain, where raw materials are purchased from multiple suppliers at the first stage, and external demand from vendors occurs at the last stage. Joint replenishment is considered when ordering raw materials. The demand is known and may change from period to period. Stages of this production-distribution serial structure correspond to inventory locations. The first two stages stand for storage areas holding raw materials and finished products in a manufacturing facility; additional intermediate stages represent either manufacturing facilities or centralized warehouses. The last stage is a distribution center that directly serves customer demand. The problem is modeled as a time-expanded transshipment network, which is defined by the nodes and arcs that can be reached by feasible material flows. At first, an integrated approach model aimed at minimizing total cost of the entire supply chain is developed to determine dynamic supplier selection and inventory planning policy at the same time. In addition, a sequential approach model is developed so that inventory planning policy is solved first, and supplier selection strategy is obtained according to that. A comparison between integrated and sequential approaches is shown in the thesis; sensitivity analysis on key factors for the integrated model is presented as well. Results show that total cost is reduced under integrated approach, while major and minor ordering costs, and transportation cost are important for supplier selection under the integrated approach.
Dynamic Supply Chain Inventory Planning Models Considering Supplier Selection And Transportation Costs
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Author : Victor A. Valdebenito Candia
language : en
Publisher:
Release Date : 2010
Dynamic Supply Chain Inventory Planning Models Considering Supplier Selection And Transportation Costs written by Victor A. Valdebenito Candia 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.
Effective Multi Echelon Inventory Systems For Supplier Selection And Order Allocation
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Author : Cong Guo (Industrial engineer)
language : en
Publisher:
Release Date : 2014
Effective Multi Echelon Inventory Systems For Supplier Selection And Order Allocation written by Cong Guo (Industrial engineer) and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with Business logistics categories.
Successful supply chain management requires an effective sourcing strategy to counteract uncertainties in both the suppliers and demands. Therefore, determining a better sourcing policy is critical in most of industries. Supplier selection is an essential task within the sourcing strategy. A well-selected set of suppliers makes a strategic difference to an organization's ability to reduce costs and improve the quality of its end products. To discover the cost structure of selecting a supplier, it is more interesting to further determine appropriate levels of inventory in each echelon for different suppliers. This dissertation focuses on the study of the integrated supplier selection, order allocation and inventory control problems in a multi-echelon supply chain. First, we investigate a non-order-splitting inventory system in supply chain management. In particular, a buyer firm that consists of one warehouse and N identical retailers procures a type of product from a group of potential suppliers, which may have different prices, ordering costs, lead times and have restriction on minimum and maximum total order size, to satisfy stochastic demand. A continuous review system that implements the order quantity, reorder point (Q, R) inventory policy is considered in the proposed model. The model is solved by decomposing the mixed integer nonlinear programming model into two sub-models. Numerical experiments are conducted to evaluate the model and some managerial insights are obtained with sensitivity analysis. In the next place, we extend the study to consider the multi-echelon system with the order-splitting policy. In particular, the warehouse acquisition takes place when the inventory level depletes to a reorder point R, and the order Q is simultaneously split among m selected suppliers. This consideration is important since it could pool lead time risks by splitting replenishment orders among multiple suppliers simultaneously. We develop an exact analysis for the order-splitting model in the multi-echelon system, and formulate the problem in a Mixed Integer Nonlinear Programming (MINLP) model. To demonstrate the solvability and the effectiveness of the model, we conduct several numerical analyses, and further conduct simulation models to verify the correctness of the proposed mathematical model.
Modeling Of Responsive Supply Chain
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Author : M.K. Tiwari
language : en
Publisher: CRC Press
Release Date : 2012-08-20
Modeling Of Responsive Supply Chain written by M.K. Tiwari and has been published by CRC Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-08-20 with Business & Economics categories.
A guide to help readers meet the demands of an evolving competitive business environment, Modeling of Responsive Supply Chain outlines novel concepts and strategies for implementing a fully integrated system of business improvement methodologies. This self-contained reference covers various key aspects of supply chain management, which is crucial to boosting industrial growth in the face of expanding globalization in the manufacturing and transportation sectors. The book focuses on topics that could potentially improve the free flow of goods and services between nations by helping users assess the performance of logistic systems deployed to achieve this end. Chapters present a conventional and evolutionary approach to coordinating all elements of the supply chain to optimize an enterprise’s competitive advantage. The authors explore different models associated with transportation, facility location, and assignments, as well as planning and scheduling. They also address diverse technologies, such as RFID tags used to monitor product flow within the supply chain network. This book addresses the importance of: Recognizing responsiveness as a metric of supply chain performance Domain interfaces for solving the optimization problem by making supply chains more responsive Coordination through contracts to enhance responsiveness System dynamics methodology to achieve responsiveness, as well as management principles, control theory, and computer simulation The use of different types of technologies to build a better supply chain that achieves higher responsiveness Few, if any, single volumes provide the detailed explanation of practical and conceptual approaches found in this book. It covers the entire spectrum of topics and will be equally useful as a reference for scholars and graduate students and as a compendium for practitioners dealing with real-life problems in contemporary supply chain management.
Quantitative Models For Supply Chain Management
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Author : Sridhar Tayur
language : en
Publisher: Springer Science & Business Media
Release Date : 2012-12-06
Quantitative Models For Supply Chain Management written by Sridhar Tayur 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 2012-12-06 with Business & Economics categories.
Quantitative models and computer-based tools are essential for making decisions in today's business environment. These tools are of particular importance in the rapidly growing area of supply chain management. This volume is a unified effort to provide a systematic summary of the large variety of new issues being considered, the new set of models being developed, the new techniques for analysis, and the computational methods that have become available recently. The volume's objective is to provide a self-contained, sophisticated research summary - a snapshot at this point of time - in the area of Quantitative Models for Supply Chain Management. While there are some multi-disciplinary aspects of supply chain management not covered here, the Editors and their contributors have captured many important developments in this rapidly expanding field. The 26 chapters can be divided into six categories. Basic Concepts and Technical Material (Chapters 1-6). The chapters in this category focus on introducing basic concepts, providing mathematical background and validating algorithmic tools to solve operational problems in supply chains. Supply Contracts (Chapters 7-10). In this category, the primary focus is on design and evaluation of supply contracts between independent agents in the supply chain. Value of Information (Chapters 11-13). The chapters in this category explicitly model the effect of information on decision-making and on supply chain performance. Managing Product Variety (Chapters 16-19). The chapters in this category analyze the effects of product variety and the different strategies to manage it. International Operations (Chapters 20-22). The three chapters in this category provide an overview of research in the emerging area of International Operations. Conceptual Issues and New Challenges (Chapters 23-27). These chapters outline a variety of frameworks that can be explored and used in future research efforts. This volume can serve as a graduate text, as a reference for researchers and as a guide for further development of this field.
Influencing Customer Demand
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Author : Mahya Hemmati
language : en
Publisher: CRC Press
Release Date : 2021-07-21
Influencing Customer Demand written by Mahya Hemmati and has been published by CRC Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-07-21 with Business & Economics categories.
In today’s competitive markets, considering the demand and the supply chain sides is crucial to keeping revenue and customer satisfaction maximized. Managing and planning demand play a vital role in the sustainability of a company. This is the first book to the discuss managerial, mathematical, and conceptual framework of influencing factors on demand along with accurate mathematical analyses to evaluate and raise revenue. The book provides an understanding of the key elements that impact buyer demand. It presents the mathematical relationship between the influencing factors and the demand functions. It discusses the methods used for inspiring demand, how to measure demand dependency on components such as price, quality, and inventory, and it helps management improve alignment between supply and demand by affecting the level and understanding of the role within supply chain management (SCM). This book is applicable for the professional as well as for academia. It can help those working in SCM, project management, production, inventory control, scheduling, engineering management, retail management, and operations management.
A Multi Echelon Inventory System With Supplier Selection And Order Allocation Under Stochastic Demand
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Author : Cong Guo (Industrial engineer)
language : en
Publisher:
Release Date : 2013
A Multi Echelon Inventory System With Supplier Selection And Order Allocation Under Stochastic Demand written by Cong Guo (Industrial engineer) and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
This article addresses the development of an integrated supplier selection and inventory control problems in supply chain management by developing a mathematical model for a multi-echelon system. In particular, a buyer firm that consists of one warehouse and N identical retailers wants to procure a type of product from a group of potential suppliers, which may require different price, ordering cost, lead time and have restriction on minimum and maximum total order size, to satisfy the stochastic demand. A continuous review system that implements the order quantity, reorder point (Q, R) inventory policy is considered in the model. The objective of the model is to select suppliers and to determine the optimal inventory policy that coordinates stock level between each echelon of the system while properly allocating orders among selected suppliers to maximize the expected profit. The model has been solved by decomposing the mixed integer nonlinear programming model into two sub-models. Numerical experiments are conducted to evaluate the model and some managerial insights are obtained by performing some sensitivity analysis.