Dynamic conformance and design quality in a supply chain: an assessment of contracts’ coordinating power

We consider a two-echelon supply chain involving one manufacturer and one supplier who collaborate on improving both design and conformance quality. Design quality is supposed to increase product desirability, and therefore market demand, while conformance quality should reduce the proportion of defective items, and therefore increase the manufacturer’s sales revenue. We investigate how the supply chain parties allocate effort between design and conformance quality under both cooperative and non-cooperative settings in an intertemporal framework. Furthermore, we evaluate wholesale price contracts and revenue-sharing contracts in terms of their performance and coordination power. We show that although a revenue-sharing contract enables the manufacturer to effectively involve the supplier in quality improvement, neither contract type allows for perfect coordination resulting in the quality that can be achieved by a cooperative supply chain. We thus suggest a reward-based extension to the revenue-sharing contract, to ensure system-wide optimal quality performance. Importantly, we find that the supplier would be better off adopting a reward-based revenue sharing contract and refusing a standard revenue-sharing contract, while the opposite would be true for the manufacturer.     

Contracting with demand uncertainty under supply chain competition

We examine supply chain contracts for two competing supply chains selling a substitutable product, each consisting of one manufacturer and one retailer. Both manufacturers are Stackelberg leaders and the retailers are followers. Manufacturers in two competing supply chains may choose different contracts, either a wholesale price contract in which the retailer??s demand forecasting information is not shared, or a revenue-sharing contract in which the retailer??s demand forecasting information is shared. Under supply chain competition and demand uncertainty, we identify which contract is more advantageous for each supply chain, and under what circumstances.     

Manufacturer’s revenue-sharing contract and retail competition

This paper investigates a revenue-sharing contract for coordinating a supply chain comprising one manufacturer and two competing retailers. The manufacturer, as a Stackelberg leader, offers a revenue-sharing contract to two competing retailers who face stochastic demand before the selling season. Under the offered contract terms, the competing retailers are to determine the quantities to be ordered from the manufacturer, prior to the season, and the retail price at which to sell the items during the season. The process of pricing and ordering is expected to result in an equilibrium as in the Bayesian Nash game. On the basis of anticipated responses and actions of the retailers, the manufacturer designs the revenue-sharing contract. Adopting the classic newsvendor problem model framework and using numerical methods, the study finds that the provision of revenue-sharing in the contract can obtain better performance than a price-only contract. However, the benefits earned under the revenue-sharing contract by different supply chain partners differ because of the impact of demand variability and price-sensitivity factors. The paper also analyses the impact of demand variability on decisions about optimal retail price, order quantity and profit sharing between the manufacturer and the retailers. Lastly, it investigates how the competition (between retailers) factor influences the decision-making of supply chain members in response to uncertain demand and profit variability.     

Two-period pricing and decision strategies in a two-echelon supply chain under price-dependent demand

This paper presents a two-period supply chain model which is comprised of one manufacturer and one retailer who are involved in trading a single product. The demand rate in each period is dependent on the selling prices of the current period and the previous period. We assume that the manufacturer acts as the Stackelberg leader and declares wholesale price(s) to the retailer who follows the manufacturer’s decision and sets his selling prices for two consecutive periods. The manufacturer adopts one of the two pricing options: (1) setting the same wholesale price to both the selling periods (2) setting different wholesale prices to two different selling periods. Based on these pricing options, we develop four decision strategies of the manufacturer and the retailer and compare them. For a numerical example, we study the effects of these decision strategies on the optimal results of the supply chain. Further, we graphically analyze under what circumstances a particular decision strategy plays a dominant role.     

Optimal production and distribution policies for a two-stage supply chain with imperfect items and price- and advertisement-sensitive demand: A note

This paper develops inventory models of a vendor–buyer supply chain with imperfect products and shortages based on Rad et al. (2014) and assumes that both the selling price and advertisements influence market demand. For this reason, the buyer mandates an advertising company for promoting the product. The objective of the paper is to determine pricing, advertising, lot-sizing, backordering, and shipment policies under independent and joint optimization. Numerical examples and a sensitivity analysis illustrate the proposed models. The results indicate that coordination becomes more and more advantageous for the supply chain as the sensitivity of demand to price or advertisements increases. Furthermore, as the uncertainty in item quality increases, the buyer reduces its demand to better match demand and supply.     

多因素扰动下同价双渠道供应链协调应对突发事件

一条双渠道供应链存在一个传统零售商和一个拥有电子渠道的制造商,制造商采用了跟随零售商线上线下同价的定价策略。通过建立市场需求模型,求出供应链的最优价格、生产数量,利用博弈论和合同理论的原理设计收益共享契约。研究表明,当供应链处于稳定状态时,收益共享契约可以用来实现同价双渠道供应链的协调。当突发事件导致市场规模和制造成本发生扰动时,同价双渠道供应链存在鲁棒性,而收益共享契约也能够很好地协调同价机制下的双渠道分权供应链,最后给出一个算例验证了结论。     

需求扰动下竞争型闭环供应链的生产与协调决策分析

研究了一个制造商和两个竞争型零售商组成的闭环供应链系统在面临需求扰动时的生产决策与协调机制设计问题。研究发现:当需求扰动不大时,产量和回收率决策具有鲁棒性,但销售价格始终随着需求的扰动而变动;当面临较大的需求正扰动时集中决策者、制造商和零售商都愿意改变生产决策,当面临较大的需求负扰动时集中决策者和制造商也愿意改变决策,但零售商更希望保持原有决策;收入共享契约可以协调扰动前后的闭环供应链,但当存在较大的需求负扰动时零售商要求分享更多的利润。     

Manufacturer-buyer coordination for newsvendor-type-products with two ordering opportunities and partial backorders

In a recent paper [Weng, Z.K., 2004. Coordinating order quantities between the manufacturer and the buyer: A generalized newsvendor model. European Journal of Operational Research 156, 148–161], a newsvendor-type coordination model was developed for a single-manufacturer single-buyer channel with two ordering opportunities. This paper further extends the model to the case where the excess demand after the first order is partially backlogged and both parties share the manufacturing setup cost of the second order (if happened). We show that the decentralized system would perform best if the manufacturer covers utterly the second production setup cost, which is opposite to that obtained in Weng (2004). Another extension in the present paper is that in the centralized system, the second order decision is made by the buyer based on the channel’s benefit rather than based on the buyer’s benefit as in Weng (2004). It is proved that the expected profit of the system in our paper is always larger than that in Weng (2004). In order to maximize the expected profit of the channel, two coordinated policies are proposed to achieve perfect coordination: a two-part-tariff policy for the special case that the buyer pays all the manufacturing setup cost, and a revised revenue-sharing contract for the case that two parties share the manufacturing setup cost.     

Supplier–manufacturer coordination in capacitated two-stage supply chains

Manufacture-to-order is an increasingly popular strategy in commodity electronics and other similar markets where many different product configurations can be produced from common components. To succeed in this environment, manufacturers need to keep both cost and order fulfillment time low. In this article, we compare three different mechanisms that a manufacturer, whose revenues depend on order delays, may use to affect its component supplier’s inventory decisions. These mechanisms are specifying components inventory level, offering a share of the earned revenues to the supplier (called simple revenue sharing), and offering a two-part revenue-sharing scheme. We show that whereas the first two approaches do not lead to supply chain coordination, the two-part scheme does. We demonstrate with numerical experiments that up to a point, the component supplier benefits from having a high utilization of its production facility, whereas the manufacturer benefits from having excess production capacity.     

需求受价格影响的三层供应链协调模型

针对由一个制造商、一个批发商和一个零售商构成的三层供应链系统,在随机市场需求且需求受商品零售价格影响的情况下,研究了零售商如何定价和确定订货量.在此基础上给出了一个能使供应链系统达到完美协调的收益分享合约策略,最后给出了数值例子.     

Price markdown scheme in a multi-echelon supply chain in a high-tech industry

This paper studies the price markdown scheme in a supply chain that consists of a supplier, a contract manufacturer (CM), and a buyer (retailer). The buyer subcontracts the production of the final product to the CM. The CM buys the components from the supplier and charges the buyer a service fee for the final product produced. The price markdown is made possible by the supplier with the development of new manufacturing technologies that reduce the production cost for the sourced component. Consequently, the buyer adjusts the retail price in order to possibly stimulate stronger demand that may benefit both the supplier and the buyer. Under this scenario, we identify the optimal discount pricing strategies, capacity reservation, and the stocking policies for the supplier and the buyer. We also investigate the optimal inventory decision for the CM to cope with the price discount by considering both demand and delivery uncertainties. Our results suggest that higher production cost accelerates the effects of higher price sensitivity on lowering the optimal capacity and stocking policies in the supply chain. The effect of mean demand error on the optimal prices is relatively marginal compared with that from price sensitivity. We also found that increasing the standard deviation of the random demand does not necessarily increase the stocking level as one would predict. The results show that delivery uncertainty plays an important role in the inventory carried beyond the price break. We discuss potential extensions for future research.     

Supply chain model for a deteriorating product with time-varying demand and production rate

The paper develops a two-echelon supply chain model with a single-buyer and a single-vendor. The buyer sells a seasonal product over a short selling period and its inventory is subject to deterioration at a constant rate over time. The vendor's production rate is dependent on the buyer's demand rate, which is a linear function of time. Also, the vendor's production process is not perfectly reliable; it may shift from an in-control state to an out-of-control state at any time during a production run and produce some defective (non-conforming) items. Assuming that the vendor follows a lot-for-lot policy for replenishment made to the buyer, the average total cost of the supply chain is derived and an algorithm for finding the optimal solution is developed. The numerical study shows that the supply chain coordination policy is more beneficial than those policies obtained separately from the buyer's and the vendor's perspectives.     

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.     

三层供应链上需求信息不对称下Newsboy型协作问题

本文主要研究单产品在单周期内由供应商、制造商、零售商组成的三层供应链上的协作订购问题,即在随机需求下供应商、制造商、零售商以利润最大化为目的的最优协作订购问题。在需求信息不对称下,零售商充分了解需求信息。在协作订购时面临四种策略,给出了在这四种策略下的四种利润模型及零售商在这四种策略下的最优订购量并比较它们的大小,最后通过需求服从正态分布的实例验证了供应商一制造商一零售商在采用数量折扣和返回措施三者完全合作时供应链上的利润最大。     

双渠道闭环供应链的三种回收模式的建模分析

针对生产商负责网上直销、零售商负责网下零售、且具有回收再制造功能的双渠道闭环供应链,首先分析了生产商负责产品回收和零售商负责产品回收下生产商和零售商之间的博弈行为,建立了刻画两种回收模式的两层规划模型;进而假定生产商委托第三方企业负责回收,分析了生产商、零售商和第三方回收企业之间的博弈行为,建立了对应此一主两从博弈结构的带均衡约束的两层规划模型.对所得模型进行了模型求解,得到了三种回收模式下双渠道闭环分散式供应链的最优直销价、零售价和回收再制造率决策.通过数值算例对上述三种回收模式进行了比较分析,并对刻画网上直销吸引力的相关参数进行了灵敏度分析.研究发现,生产商负责回收时的回收再制造率最高;网上直销具有激发潜在需求(正效应)和吸引零售市场需求发生转移(负效应)的双重效应等.     

预付款融资下基于改进收益共享与回购联合契约的双渠道供应链协调研究

随机需求下,考虑了制造商存在资金约束的双渠道供应链在采用预付款融资时,如何实现供应链协调的问题。在制造商为主方的Stackelberg博弈下,研究了制造商和零售商分散决策时的最优库存决策问题,并通过设计改进收益共享与回购联合契约使得供应链达到协调。在此基础上,讨论了供应链的帕累托改进区间。最后,通过算例验证了联合契约对双渠道供应链协调及帕累托改进的有效性,并分析了契约参数和融资参数对供应链的影响。     

Revenue-sharing versus wholesale price mechanisms under different channel power structures

We consider a supply chain channel with two manufacturers and one retailer. Each manufacturer can choose either a wholesale price contract or a revenue-sharing contract with the retailer. We discuss and compare the results of two different types of contracts under different channel power structures, to check whether it is beneficial for manufacturers to use revenue-sharing contracts under different scenarios. Then we consider a supply chain channel with one manufacturer and two retailers. Each retailer can choose either a wholesale price contract or a revenue-sharing contract with the manufacturer. We analyze the likely outcomes under different scenarios to discover whether it is beneficial to use revenue-sharing contracts.     

Coordination mechanism for a deteriorating item in a two-level supply chain system

The subject of the coordination between the suppliers and the buyers in multi-echelon inventory-distribution systems has been studied by many researchers. This paper considers a supply chain including a manufacturer and several buyers and assumes that the inventory items deteriorate over time and its inventory level decreases. In order to determine the order policies, coordination over the supply chain is achieved by scheduling the buyers’ delivery days and their coordination with the manufacturer’s production cycle. A mathematical model is developed and analyzed. To test the efficiency of the proposed model, two other models with the supposition of lot-sizing policies with common order cycle and independent deciding are also developed. In comparison to the other two models, the numerical results show that the synchronizing model of production and delivery cycles works better and has less total cost. In addition, in order to encourage the buyers in cooperation, a model on profit sharing is proposed that equitably shares the total savings with all the parties.     

Coordination mechanism for capacity reservation by considering production time,production rate and order quantity

In this paper we study the coordination of a dyadic supply chain producing a high-tech product by contracts. The product has a short life cycle and the buyer faces stochastic demands during the selling period. We consider the production time, which causes the inventory costs on supplier’s side. As the supplier builds production capacity in advance, the production rate is limited to the capacity created during the production time. In addition, we take into account the inventory cost and operational cost for the buyer. We examine the model under both full information and partial information updating situations, and propose a coordinating contract for each case. Our analysis includes the study of members’ decisions under both forced and voluntary compliance regimes. Numerical results are presented to provide more insights into the models developed and the mechanisms proposed.     

两周期零售商竞争下的闭环供应链的定价和协调策略研究

研究了两生命周期零售商竞争环境下的闭环供应链的定价和生产策略:第一个生命周期中,只有一个制造商和一个零售商,制造商利用原材料生产新制造产品;第二个周期中,制造商生产新制造产品的同时利用自己回收的废旧产品生产再制造产品,并且出现了竞争零售商。分别建立了两周期零售商竞争环境下的分散决策模型和集中决策模型,得到了最优定价和生产策略。结果表明:零售商竞争会降低产品的零售价,增加产品的销售量。制造商利用收益共享契约制定合适的批发价和收益共享比率能协调整个闭环供应链,与零售商实现共赢。最后给出了一个算例验证了上述结论。