Impacts of supplier knowledge sharing competences and production capacities on radical innovative product sourcing

An effective sourcing strategy leads to cost savings and value added collaborations. For radical innovative product sourcing (RIPS), the exact nature and demand of products are highly uncertain. As such, knowledge sharing competences and production capacities of potential suppliers are prerequisite capabilities. The main aim is to investigate the impacts of these considerations on sourcing strategies through the development of two optimization models. Under the assumptions of single product sourcing, single period time window, uncertain demand and stochastic supply, KKT conditions are used to solve a simplified nonlinear optimization model analytically. The model is then expanded and particle swarm optimization is used to solve numerically the number of suppliers, order quantities and the level of relationship investments that maximize the value of sourcing. Through extensive scenario and sensitivity analyses, we provide some key insights.     

Unreliable newsboy problem with a forecast update

In this paper, we derive an optimal ordering policy for an unreliable newsboy who can place two sequential orders before the start of a single selling season by using a demand forecast update. Supply yield is modeled using a uniform distribution considering both the minimum order guarantee and the maximum yield. Our results indicate that a firm should focus on increasing the minimum order guarantee from a first stage supplier to reduce its total supply chain cost.     

供应链协作创新模式比较与协调契约

基于协作创新和现代商务模式,以供应商为供应链核心企业,考虑了在需求对价格敏感情况下供应商、制造商、第三方研发机构协作创新的博弈,对供应链创新协作的三种模式进行了建模分析.研究结果发现在创新能力相当的情况下,无论从创新力度、各方期望利润,还是从需求来看,供应商与供应链上关系紧密的下游协作创新的模式不仅可以降低自己创新的投资和风险,而且提高了整个供应链创新力度和水平,在收益上达到双赢,其优于不进行协作创新和委托第三方研发机构的协作创新模式.最后提出了供应链协调契约.     

供应链协作创新模式比较与协调

从供应链中居于核心地位的供应商出发,基于下游制造商对上游创新的影响,在需求对价格敏感情况下考虑了供应商、制造商、第三方研发机构协作创新的博弈过程,对供应链创新协作的三种模式进行了建模分析。研究结果发现在创新能力相当的情况下,无论从创新力度、各方期望利润,还是从满足需求量等来看,供应商与供应链上关系紧密的下游协作创新的模式不仅可以降低自己创新的投资和创新风险,而且提高了整个供应链创新力度和水平,又可以在收益上双赢,其优于不进行协作创新和委托第三方研发机构的协作创新模式。最后进一步提出了供应链协调策略。     

Impact of equity and equality on stability and collusion in a decentralized network

We consider a firm that procures a product from a regular supplier whose production is subject to both supply disruption and random yield risks and a backup supplier whose production capacity requires reservation in advance. Under both deterministic and stochastic demand, we study the impact of the two types of supply risks on the firm’s optimal procurement decisions and the importance of correctly identifying the source of supply risks. We find that if the overall supply risk is unchanged but its main source shifts from random yield to supply disruption, the firm should order more from the regular supplier and reserve less capacity from the backup supplier. Ignoring the existence of supply disruption leads to under-utilization of the regular supplier and over-utilization of the backup supplier. Moreover, we examine the option value of the reserved capacity that is affected by the uncertainty of customer demand. We find that the option value increases/decreases in demand uncertainty if the reservation capacity is exercised after/before demand is realized.     

基于实物期权的双源供应链柔性采购协调策略

在需求不确定下,由风险规避的供应商和占主导地位的零售商组成的二级供应链中,构建了在现货市场影响下基于实物期权的双源柔性采购协调模型,给出了实现供应链协调的最优期权参数的求解算法,探讨了现货市场价格不确定性和供应商风险规避特性对零售商采购策略和双方利润的影响。研究结果表明,在考虑现货市场影响和供应商风险规避的条件下,实物期权契约可以实现供应链协调。     

A coordination system for seasonal demand problems in the supply chain

This article considers a single product coordination system using a periodic review policy, participants of the system including a supplier and one or more heterogeneous buyers over a discrete time planning horizon in a manufacturing supply chain. In the coordination system, the demand of buyer in each period is deterministic, the supplier replenishes all the buyers, and all participants agree to plan replenishment to minimize total system costs. To achieve the objective of the coordination system, we make use of small lot sizing and frequent delivery policies (JIT philosophy) to transport inventory between supplier and buyers. Moreover, demand variations of buyers are allowed in the coordination system to suit real-world situations, especially for hi-tech industries. Furthermore, according to the mechanisms of minimizing the total relevant costs, the proposed method can obtain the optimal number of deliveries, shipping points and shipping quantities in each order for all participants in the coordination system.     

A fuzzy optimization approach for procurement transport operational planning in an automobile supply chain

We consider a real-world automobile supply chain in which a first-tier supplier serves an assembler and determines its procurement transport planning for a second-tier supplier by using the automobile assembler’s demand information, the available capacity of trucks and inventory levels. The proposed fuzzy multi-objective integer linear programming model (FMOILP) improves the transport planning process for material procurement at the first-tier supplier level, which is subject to product groups composed of items that must be ordered together, order lot sizes, fuzzy aspiration levels for inventory and used trucks and uncertain truck maximum available capacities and minimum percentages of demand in stock. Regarding the defuzzification process, we apply two existing methods based on the weighted average method to convert the FMOILP into a crisp MOILP to then apply two different aggregation functions, which we compare, to transform this crisp MOILP into a single objective MILP model. A sensitivity analysis is included to show the impact of the objectives weight vector on the final solutions. The model, based on the full truck load material pick method, provides the quantity of products and number of containers to be loaded per truck and period. An industrial automobile supply chain case study demonstrates the feasibility of applying the proposed model and the solution methodology to a realistic procurement transport planning problem. The results provide lower stock levels and higher occupation of the trucks used to fulfill both demand and minimum inventory requirements than those obtained by the manual spreadsheet-based method.     

Buyer-supplier currency exchange rate flexibility contracts in global supply chains

This paper analyzes a decentralized global supply chain under a newsvendor setting, where a supplier delivers a certain quantity of a single product to a buyer in accordance with the terms of a mutually agreed upon contract. This contract is signed prior to the delivery of the product and subsequent payment, thus, exposing the supply chain to the risk of currency exchange rate fluctuations. We propose two types of currency exchange rate flexibility contracts to explore the characteristics of exchange rate risk mitigation policies for the buyer and the supplier. Furthermore, we investigate the effects of the contract structures on the optimal order quantity, as well as the expected profits of both supply chain members. Our results show that the optimal order quantity of the buyer decreases when the wholesale price is uncertain due to exchange rate volatility. Also, both our proposed contracts tend to improve the expected profits of both the buyer and the supplier, when the payment is made in the supplier’s currency, indicating the desirability of adopting such contractual agreements from the perspective of both parties. On the other hand, when the payment is made in the buyer’s currency, our suggested contracts do not yield such win-win scenarios. Finally, we examine the effectiveness of availing the services of a local vendor, which is capable of satisfying any demand in excess of the quantity ordered from the foreign source with short notice, in order to mitigate the risks associated with an overseas order.     

风险时收益共享-贸易信贷契约下多个竞争零售商的供应链协调

在供应商向多个零售商提供贸易信贷的环境下,本文考虑了零售商存在违约风险和他们之间存在竞争时的供应链协调问题。研究表明,在比例分配市场需求下,多个竞争的零售商之间存在唯一的纳什均衡订购量,以及零售商违约风险的提高和他们之间竞争增强都会增加均衡订购量。当零售商之间的竞争较弱时,贸易信贷将无法协调供应链。为此,本文使用了收益分享与贸易信贷相结合的机制以协调供应链,且分析了零售商的违约风险和他们之间的竞争对协调契约参数的影响。当零售商的竞争强度一定时,批发价和风险溢价都随着零售商违约风险的提高而增大,而收益分享比例随着违约风险的提高而减小;当零售商的违约风险一定时,批发价和风险溢价都随着零售商之间竞争强度的提高而增大,而收益分享比例随着竞争强度的增强而减小。进一步的研究发现,零售商的违约风险越高以及他们之间竞争越激烈对零售商越不利,而对供应商越有利。最后,结合数值实验验证了收益共享-贸易信贷契约的有效性。     

Coordinating a three-echelon supply chain under price and quality dependent demand with sub-supply chain and RFM strategies

The paper considers a three-echelon supply chain which consists of one supplier, one manufacturer and one retailer for trading a single product. The market demand at the retailer is influenced by the retail price and the quality of the product. The quality of the finished product at the manufacturer depends on the supplier’s raw material quality. We analyze the model for both deterministic and stochastic demand patterns. We first study the centralized and decentralized systems, and then the decentralized system with a sub-supply chain coordination strategy (where the manufacturer chooses to merge with either the supplier or the retailer and then acts as a single entity) and the two-level retail fixed mark-up (RFM) strategy. In the case of the two-level RFM strategy, the manufacturer and the retailer use fixed mark ups over the supplier’s wholesale price. The proposed models are demonstrated through numerical examples. It is observed from the numerical study that the two-level RFM strategy is superior to the sub-supply chain coordination strategy. Further, the two-level RFM strategy in the stochastic demand scenario is not as effective as in the deterministic demand scenario.     

Ordering and pricing decisions in a two-echelon supply chain with asymmetric demand information

This article examines coordinated decisions in a decentralized supply chain that consists of one supplier and one retailer, and faces random demand of a single product with a short life cycle. We consider a setting where the retailer has accurate demand information while the supplier does not. Such a problem with asymmetric demand information can be viewed as an extension of the newsboy problem in which both the supplier and the retailer possess the same demand information. Combining the mechanism of sharing demand information and that of quantity discount and return policy enables us to develop three coordinated models in contrast with the basic and uncoordinated model. We are able to show the ordinal relationship among the retailer’s optimal order quantities in these four models under a general form of random demand, and compare the supply chain profits and conduct sensitivity analysis analytically in four models under uniform random demand. We also provide numerical results under normal random demand that bear a resemblance to those under uniform random demand.     

Sourcing decisions with capacity reservation contracts

By committing to long-term supply contracts, buyers seek to lower their purchasing costs, and have products delivered without interruption. When a long-term contract is available, suppliers are less pressured to find new customers, and can afford to charge a price lower than the prevailing spot market price. We examine sourcing decisions of a firm in the presence of a capacity reservation contract that this firm makes with its long-term supplier in addition to the spot market alternative. This contract entails delivery of any desired portion of a reserved fixed capacity in exchange for a guaranteed payment by the buyer. We investigate rational actions of the two parties under two different types of periodic review inventory control policies used by the buyer: the two-number policy, and the base stock policy. When typical demand probability distributions are considered, inclusion of the spot market source in the buyer’s procurement plan significantly reduces the capacity commitments from the long-term supplier.     

Supplier switching decisions

In order to maximize profit, a buying firm should continuously search for and access sources which offer more favorable prices. While the literature is replete with works on the formation and development of buyer–supplier relationships, there is surprisingly only scarce research on the termination of such relationships and supplier switching. Using the concept of switching costs in a principal-agent framework, we at first analyze whether a firm switches the entire or a partial quantity to an alternative supplier when there is either symmetric or asymmetric information about the alternative supplier’s cost structure. Information asymmetry results in inert supplier switching decisions. Subsequently, we extend our model and take competitive reactions of the incumbent supplier and economies of scale effects into consideration. We find conditions under which ‘no’, ‘partial’ and ‘complete’ switching occurs, which depend on the buying firm’s beliefs about the alternative supplier’s unit costs, switching costs, the price offered by the incumbent supplier, and refinements of the price offered by the incumbent supplier due to competitive reactions and economies of scale. Broader implications for supplier relationship management and sourcing strategy decisions are also provided.     

考虑促销努力与生产努力的供应链召回努力策略研究

考虑一条由单个供应商和单个制造商组成的二级供应链,面对产品召回事件,供应商和制造商都可以通过召回努力来降低召回事件发生的概率。本文研究了供应链最优召回努力策略,研究发现双方的召回努力与初始期望单位召回成本和潜在市场规模有关。当潜在市场规模和初始期望单位召回成本都较小时,双方均选择部分召回努力,当潜在市场规模和初始期望单位召回成本都较大时,双方均选择全部召回努力,否则,供应商选择全额召回努力而制造商选择部分召回努力。由于制造商的促销努力与供应商的生产努力是企业扩大市场规模常用的策略,因此,本文还研究了这两种策略分别对供应链召回努力策略的影响。我们发现这两种策略都能降低双方采取全额召回努力时潜在市场规模的门槛,激励双方增加召回努力,降低产品召回概率并增加供应链成员的利润。特别的,我们还对比了这两种策略对双方召回努力的影响,发现当促销努力成本系数与生产努力成本系数都较小时,两种策略对召回努力的影响相同,当生产努力成本系数足够大时,考虑促销努力时双方的召回努力水平更高,否则,考虑生产努力时双方的召回努力水平更高。     

Impact of product pricing and timing of investment decisions on supply chain co-opetition

In supply chain co-opetition, firms simultaneously compete and co-operate in order to maximize their profits. We consider the nature of co-opetition between two firms: The product supplier invests in the technology to improve quality, and the purchasing firm (buyer) invests in selling effort to develop the market for the product before uncertainty in demand is resolved. We consider three different decision making structures and discuss the optimal configuration from each firm’s perspective. In case 1, the supplier invests in product quality and sets the wholesale price for the product. The buyer then exerts selling effort to develop the market and following demand potential realization, sets the resale price. In case 2, the supplier invests in product quality followed by the buyer’s investment in selling effort. Then, after demand potential is observed, the supplier sets the wholesale price and the buyer sets the resale price. Finally, in case 3, both firms simultaneously invest in product quality and selling effort, respectively. Subsequently, observing the demand potential, the supplier sets the wholesale price and the buyer sets the resale price. We compare all configuration options from both the perspective of the supplier and the buyer, and show that the level of investment by the firms depends on the nature of competition between them and the level of uncertainty in demand. Our analysis reveals that although configuration 1 results in the highest profits for the integrated channel, there is no clear dominating preference on system configuration from the perspective of both parties. The incentives of the co-opetition partners and the investment levels are mainly governed by the cost structure and the level of uncertainty in demand. We examine and discuss the relation between system parameters and the incentives in desiging the supply contract structure.     

Supply chain performance assessment and supplier and component importance identification in a general competitive multitiered supply chain network model

In this paper, we develop a multitiered competitive supply chain network game theory model, which includes the supplier tier. The firms are differentiated by brands and can produce their own components, as reflected by their capacities, and/or obtain components from one or more suppliers, who also are capacitated. The firms compete in a Cournot–Nash fashion, whereas the suppliers compete a la Bertrand since firms are sensitive to prices. All decision-makers seek to maximize their profits with consumers reflecting their preferences through the demand price functions associated with the demand markets for the firms’ products. We construct supply chain network performance measures for the full supply chain and the individual firm levels that assess the efficiency of the supply chain or firm, respectively, and also allow for the identification and ranking of the importance of suppliers as well as the components of suppliers with respect to the full supply chain or individual firm. The framework is illustrated through a series of numerical supply chain network examples.     

供应中断风险下采购与定价决策分析

供应中断是供应链上的企业可能面临的问题,运用合理的采购策略可以帮助企业有效缓解供应中断风险。本文研究了供应中断下供应商和制造商之间的纵向竞争和两个制造商之间的横向竞争问题。供应商制定批发价,两个制造商采用不同的采购策略进行产量博弈,其中一个制造商采用紧急双源订货策略,另一个采用可靠单源订货策略。论文采用了多阶段博弈模型,分析了制造商之间的合谋与竞争两种行为,求出了供应商和制造商的最优决策,比较了这两种行为对供应商和制造商的影响。通过数值分析,讨论了成本参数和可靠性参数对于最优订货量的影响以及对于采用不同订货策略的制造商期望利润的影响。     

Channel coordination using product returns for a supply chain with stochastic salvage capacity

We examine returns policy in a Newsboy framework. Unlike the prior literature, however, we assume that both supplier and retailer have limited and stochastic salvage capacities. We first analyze the case of integrated supply chain in which the agents’ decisions are fully coordinated for the joint profits. The result prescribes a partial returns policy, in which the retailer returns a part of the leftovers to the supplier and liquidates the remainder through its clearance sale. In a decentralized system, the supplier should motivate the retailer to duplicate the outcome of the integrated system in choosing order and returns quantities. We propose three coordination contracts, of which each uses two benefit transfer schemes as an incentive to the retailer, instead of using a single benefit scheme as in the prior literature. All three effectively coordinate the supply chain. The supplier, as a Stakelberg leader, chooses the most profitable one since each contract yields the different shares of the agents’ profits.     

Optimal pricing and inventory policies with reliable and random-yield suppliers: characterization and comparison

In this paper, we study the joint pricing and inventory replenishment problem for a periodic-review inventory system with random demand and dual suppliers, one of the suppliers is reliable but more expensive, the other supplier is less expensive but is unreliable with random yield. We characterize the firm’s optimal policies that simultaneously determine the optimal ordering and pricing decisions in each period over a finite planning horizon, and investigate the impacts of supply source diversification and supplier reliability on the firm and on its customers. We show that having source diversification or higher reliability of suppliers not only increases the firm’s expected profit, but also results in a lower optimal selling price, thus they benefit both the firm and its customers.