A review of non-cooperative newsvendor games with horizontal inventory interactions

There are numerous applications of game theory in the analysis of supply chains where multiple actors interact with each other in order to reach their own objectives. In this paper we review the use of non-cooperative game theory in inventory management within the newsvendor framework describing a single period inventory control model with the focus on horizontal interactions among multiple independent newsvendors. We develop a framework for identifying these types of horizontal interactions including, for example, the models with the possibility of inventory sharing via transshipments, and situations with substitutable products sold by multiple newsvendors. Based on this framework, we discuss and relate the results of prior research and identify future research opportunities

Supply Chain

Traditionally supply chain management has meant factories, assembly lines, warehouses, transportation vehicles, and time sheets. Modern supply chain management is a highly complex, multidimensional problem set with virtually endless number of variables for optimization. An Internet enabled supply chain may have just-in-time delivery, precise inventory visibility, and up-to-the-minute distribution-tracking capabilities. Technology advances have enabled supply chains to become strategic weapons that can help avoid disasters, lower costs, and make money. From internal enterprise processes to external business transactions with suppliers, transporters, channels and end-users marks the wide range of challenges researchers have to handle. The aim of this book is at revealing and illustrating this diversity in terms of scientific and theoretical fundamentals, prevailing concepts as well as current practical applications

Inventory Management and Supply Chain Coordination Mechanisms

This dissertation is on inventory management and supply chain coordination mechanisms within an economic order quantity framework. Specifically, this research focuses on modeling optimal order policies and coordination mechanisms for a supply chain involving items which experience probabilistic failure during storage. These items are common types of manufactured items which, nonetheless, require specialized order policy considerations due to their unique characteristics. We first develop the solution for the buyer’s problem through the use of an economic order quantity (EOQ) model incorporating item failure. We then proceed to model the manufacturer’s problem through the use of an economic production quantity (EPQ) model. Finally, we consider mechanisms to promote mutually-beneficial cooperation between the supplier and n buyers in service of coordinating the entire supply chain. While prior research has focused on items which can be repaired or sold at a discount upon failure, such models are inappropriate for systems where repair costs exceed or are equivalent to item costs and imperfect items are unacceptable. Examples of industries featuring these inventory conditions include the medical, defense, and electronics industries where defective items are largely useless. First, our EOQ model considers a buyer-supplier relationship featuring delivery and stocking of items which experience probabilistic failure in storage. Thereafter, our EPQ model considers in-house production of such items. Collectively, our EOQ and EPQ models provide methods for developing optimal order policies necessary to achieve practicable supply chain coordination. In order to validate the necessity of the developed models, we include an empirical analysis of item reliability for some common mechanical components used in the defense industry, thereby identifying items which fail in the manner modeled in this dissertation. Having considered optimal order policies for both buyers and suppliers, we next develop an optimal solution for a coordinated supply chain. The proposed solution allows the manufacturer to coordinate a supply chain consisting of n buyers in order to achieve a common replenishment time. Through this optimization framework, we minimize total system-wide costs and derive the cost savings associated with our coordinated solution. Numerical examples are then used to demonstrate the magnitude of cost savings achievable through our coordination framework. We conclude by proposing several mechanisms for leveraging the resulting cost savings to induce mutually-beneficial cooperation between the supplier and multiple buyers. Given the lack of buyer-supplier cooperation noted in empirical research related to supply chain coordination, our identification of specific mechanisms useful for inducing mutually-beneficial cooperation between buyers and suppliers represents an important practical contribution to the supply chain coordination literature. These models are accompanied by a thorough overview and discussion of economic order quantity theory, optimal order policies, and supply chain coordination mechanisms.Ph.D., Business Administration -- Drexel University, 201

Supply chain coordination and integration under yield loss

The primary objective of this dissertation is to develop analytical models for typical supply chain situations to help supply chain decision-makers under supply yield loss. We derive solution procedures for each model and present several managerial insights obtained from our models through numerical examples. Additionally, this research provides decision-makers insights on how to incorporate uncertainty in demand and supply and shortage information into a mathematical model. This study deals with three forms of integrated cost-profit models under different scenarios including coordination policy and supply yield loss in a two-stage supply chain involving a retailer and a supplier, dealing with a single product under deterministic condition. We compare the profits of the whole supply chain system under the coordinated policy with those of individual decision making approaches and demonstrate the efficiency of coordination. These models attempts to find the optimal solutions for the retailer’s order quantity, quality level, amount of emergency procurement, and the production and shipment decisions of the supplier, so that the resulting joint total profit for the entire supply chain is maximized. We illustrate our model and the potential benefits of outsourcing in a supply chain system through a numerical example. Extending the analyses obtained above, we then develop models for an integrated supplier–retailer supply chain under imperfect production and shortages, with the additional decision variable of market pricing on the part of the retailer. We assume that market demand is sensitive to the retailer’s selling price and study the combined operation and pricing decisions in the supply chain. We develop profit maximization models for the cases of independent and joint optimization. The results of obtained from our analyses demonstrate that the individual profit, as well as joint profit can be increased by our suggested model, under a non-linear price dependent demand function. In addition, the results with retailer-supplier coordination tend to be superior, which leads to illustrate that setting appropriately retailer’s selling price can increase market demand and the profits of both parties, as well as that of the supply chain. Finally, numerical examples are presented to illustrate these models, and the sensitivity analyses of a selected set of model parameters on the total profit is conducted. A major finding of this study is that coordination between the retailer and the supplier improves channel profit significantly. Furthermore, the possibility of external procurement tends to improve total system profitability as the price sensitivity of demand increases.Ph.D., Business Administration -- Drexel University, 201

Key performance indicators for sustainable manufacturing evaluation in automotive companies

The automotive industry is regarded as one of the most important and strategic industry in manufacturing sector. It is the largest manufacturing enterprise in the world and one of the most resource intensive industries of all major industrial system. However, its products and processes are a significant source of environmental impact. Thus, there is a need to evaluate sustainable manufacturing performance in this industry. This paper proposes a set of initial key performance indicators (KPIs) for sustainable manufacturing evaluation believed to be appropriate to automotive companies, consisting of three factors divided into nine dimensions and a total of 41 sub-dimensions. A survey will be conducted to confirm the adaptability of the initial KPIs with the industry practices. Future research will focus on developing an evaluation tool to assess sustainable manufacturing performance in automotive companies