Leader-follower Game in VMI System with Limited Production Capacity Considering Wholesale and Retail Prices

VMI (Vendor Managed Inventory) is a widely used cooperative inventory policy in supply chains in which each enterprise has its autonomy in pricing. This paper discusses a leader-follower Stackelberg game in a VMI supply chain where the manufacturer, as a leader, produces a single product with a limited production capacity and delivers it at a wholesale price to multiple different retailers, as the followers, who then sell the product in dispersed and independent markets at retail prices. An algorithm is then developed to determine the equilibrium of the Stackelberg game. Finally, a numerical study is conducted to understand the influence of the Stackelberg equilibrium and market related parameters on the profits of the manufacturer and its retailers. Through the numerical example, our research demonstrates that: (a) the market related parameters have significant influence on the manufacturer’ and its retailers’ profits; (b) a retailer’s profit may not be necessarily lowered when it is charged with a higher inventory cost by the manufacturer; (c) the equilibrium of the Stackelberg equilibrium benefits the manufacturer.Stackelberg Game;Supply Chain;Vendor Managed Inventory

Leader-follower Game in VMI System with Limited Production Capacity Considering Wholesale and Retail Prices

VMI (Vendor Managed Inventory) is a widely used cooperative inventory policy in supply chains in which each enterprise has its autonomy in pricing. This paper discusses a leader-follower Stackelberg game in a VMI supply chain where the manufacturer, as a leader, produces a single product with a limited production capacity and delivers it at a wholesale price to multiple different retailers, as the followers, who then sell the product in dispersed and independent markets at retail prices. An algorithm is then developed to determine the equilibrium of the Stackelberg game. Finally, a numerical study is conducted to understand the influence of the Stackelberg equilibrium and market related parameters on the profits of the manufacturer and its retailers. Through the numerical example, our research demonstrates that: (a) the market related parameters have significant influence on the manufacturer’ and its retailers’ profits; (b) a retailer’s profit ma

Buyer vendor coordination models in supply chain management,

Abstract Coordination between two different business entities is an important way to gain competitive advantage as it lowers supply chain cost. This paper reviews literature dealing with buyer vendor coordination models that have used quantity discount as coordination mechanism under deterministic environment and classified the various models. An effort has also been made to identify critical issues and scope of future research

Penentuan waktu replenishment optimal dan alokasi penghematan pada sistem purchasing consortium

Tingginya biaya produksi dan operasional pengadaan merupakan permasalahan yang dialami oleh UMKM berbasis pengolahan besi saat ini. Penyebab dari tingginya biaya produksi salah satunya dikarenakan mahalnya harga bahan baku. Selanjutnya, tingginya biaya operasional pengadaan dikarenakan proses pengadaan yang dilakukan oleh UMKM hanya berdasarkan keputusan sederhana yang dibuat oleh karyawan ataupun pemilik. Salah satu solusi untuk mengurangi tingginya komponen biaya tersebut dengan mengadakan sistem pembelian bersama/purchasing consortium. Dengan mengadakan sistem pembelian bersama yang dikelola oleh agen consortium menurunkan harga bahan baku dikarenakan pembelian dilakukan langsung kepada pihak distributor besar. Distributor memberikan harga yang lebih murah dibandingkan dengan harga toko karena pembelian yang dilakukan consortium dalam jumlah yang besar, sehingga memenuhi skala ekonomis yang ditetapkan oleh distributor. Strategi purchasing consortium didekatkan dengan model common replenishment epoch sebagai metode untuk mengoordinasikan waktu replenishment setiap UMKM, sehingga pemesanan yang dilakukan bisa dalam waktu yang bersamaan. Penghematan yang diperoleh oleh UMKM terbagi menjadi dua, yang pertama penghematan biaya operasional pengadaan dengan menjalankan metode common replenishment epoch, yang kedua penghematan pembelian bahan baku dikarenakan menjalankan sistem pembelian bersama. Berdasarkan hasil perhitungan didapatkan penghematan biaya pengelolaan persediaan sebesar 55.4% & penghematan biaya bahan baku sebesar 9.8% dibandingkan dengan kondisi eksisting. Oleh karena itu, sistem purchasing consortium pantas untuk diterapkan pada UMKM pengolahan besi. ========== Current metal processing SMEs face the problem of high production cost and procurement operational cost. One of the reasons that makes high production cost is because the high raw materials price. Furthermore, employees or owners of SMEs do the procurment only based on simple decision. This will elevate the procurement operational cost. One solution to reduce the cost is by implementing a system of joint purchasing/purchasing consortium. By conducting joint purchasing system managed by a consortium agent, raw material price will be lowered due to direct purchase – it is made directly to the large distributors. Distributors provide a cheaper price than the store price since the purchasing is made in large numbers so that it fulfills the economic scale set by the distributor. Purchasing consortium strategy is based on the common replenishment epoch as a method for coordinating the replenishment time for each SME, so orders can be made at the same time. The savings obtained by SMEs is divided into two accounts, first is the procurement operational cost savings by actuating common replenishment epoch method. Secondly, savings in raw material prices due to cheaper unit price when joint purchase system is implemented. Based on the calculation results, procurement operational cost saving is worth of 55.4% and raw material cost saving is worth of 9.8% relative to the existing condition. Therefore, purchasing consortium system deserve to be applied to metal processing SMEs

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

Integrated Production, Inventory and Pricing Decisions in Two-Echelon Supply Chains

This thesis investigates the optimal decisions for maximizing the expected profit level of a supply chain when market demand is price-sensitive. We examine two-echelon supply chains consisting of a single manufacturer and one or more retailers, where the organizations simultaneously determine the retail price, production lot size and inventory replenishment schedules to maximize the profit of the entire supply chain. In particular, we first develop a model for singlemanufacturer single-retailer (SMSR) supply chains, assuming deterministic market demand. We then extend the SMSR model to supply chains with multiple-retailers (i.e. SMMR supply chains). Finally, we examine both SMSR and SMMR supply chains in stochastic market demand environments. We show that supply chain cooperation/centralization brings higher profits for the manufacturer and the retailer(s), and benefits retail consumers with a lower retail price. We propose efficient algorithms for our models and illustrate them through numerical examples. Managerial implications and future research directions are also discussed.Ph.D., Business Administration -- Drexel University, 201

Supply chain operation strategies and risk management with working capital consideration: a case study of the supply chain of lightning protection products in China

JEL: G32; D21With the advent of economic globalization, competition is increasingly hinged on supply chain. Meanwhile, working capital becomes a key element of a successful supply chain. This thesis researches the supply chain of a typical lightning protection products manufacturer in China, i.e. Company Z. The thesis starts with the working capital issues in the supply chain of Company Z; then, with the help of questionnaires and a sensible indicator system and weight assignments; analyzes and summarizes the status quo of the working capital and related key issues in the supply chain consisting of Company Z and its suppliers and customers. Building on such analysis, a two-dimensional classification matrix is created to divide suppliers and customers into four groups (namely, strategic-type, partner-type, general-type, and bottleneck-type) and supply chain operation strategies are devised for each group. Furthermore, based on such supply chain operations strategies of Company Z, a working capital risk management mechanism with an early warning system is developed, and a supply chain-based financing platform is designed to help the supply chain participants seek financing and share the risks with working capital.Com o advento da era da globalização económica, a cadeia de suprimentos tornou-se cada vez mais importante para a concorrência empresarial, e ao mesmo tempo, o fundo de maneio tornou-se num elemento chave para o sucesso da gestão da cadeia de suprimentos. Neste trabalho, a cadeia de suprimentos de uma empresa chinesa de fabricação de produtos típicos de proteção contra relâmpagos, a empresa Z, é o objeto de estudo. Tomando como ponto de partida os problemas de fundo de maneio existentes na cadeia de suprimentos da empresa Z, por meio de questionários combinados com o estabelecimento de um sistema de indexação e de ponderação, foram realizadas análises precisas sobre problemas-chaves existentes e da situação atual da gestão do fundo de maneio da cadeia de suprimentos a montante e a jusante da empresa Z. Estabeleceram-se matrizes bidimensionais de classificação para respectivamente subdividir os fornecedores e clientes em quatro categorias, a saber, categoria de fornecedores/clientes estratégicos, categoria de fornecedores/clientes parceiros, categoria de fornecedores/clientes comuns e categoria de fornecedores/clientes críticos (“engarrafamentos”) e propor estratégias diferentes na cadeia de suprimentos para diferentes categorias. Por fim, o nosso estudo indica que segundo a estratégia de operação da cadeia de suprimentos da empresa Z, deve ser estabelecido um mecanismo de controle e gestão de risco de fundo de maneio, um sistema de alerta de risco e, ainda, projetar uma plataforma de financiamento a fim de prover o financiamento emergente da cadeia de suprimentos da empresa Z e a partilha dos riscos de gestão do fundo de maneio

Optimal acquisition policy for a supply network with discount schemes and uncertain demands.

This study uses a mathematical programming approach in which a series of Mixed Integer Non-Linear Programming (MINLP) models are developed to represent a supply network for a manufacturer dealing with various quantity or volume discount schemes from suppliers, as well as incorporating uncertain product demands that follow Normal distributions. Furthermore, the manufacturer\u27s optimal acquisition policy and production level are obtained simultaneously by solving the models with an objective of maximizing the expected value of the manufacturer\u27s profit. Although complicated by the employment of an integration function, the mathematical models are solved by a GAMS program with integrated SBB, CONOPT, MINOS, and SNOPT solvers working in collaboration. This research is one of the few studies in this field to use commercial optimization software for solving such complex mathematical models. The MINLP models and the GAMS solution program are applied in two real-world cases, and the preliminary results justify the capabilities of both the mathematical models and the GAMS solution program. Numerical analysis supports the managerial implications regarding the acquisition policy, and the comparison between the quantity discount and the volume discount. (Abstract shortened by UMI.)Dept. of Industrial and Manufacturing Systems Engineering. Paper copy at Leddy Library: Theses & Major Papers - Basement, West Bldg. / Call Number: Thesis2006 .M3. Source: Masters Abstracts International, Volume: 45-01, page: 0438. Thesis (M.A.Sc.)--University of Windsor (Canada), 2005