Coordinating Contracts in SCM: A Review of Methods and Literature

Supply chain coordination through contracts has been a burgeoning area of re- search in recent years. In spite of rapid development of research, there are only a few structured analyses of assumptions, methods, and applicability of insights in this field. The aim of this paper is to provide a systematic overview of coordinating contracts in supply chain through highlighting the main concepts, assumptions, methods, and present the state-of-the- art research in this field

Coordinating Contracts in SCM: A Review of Methods and Literature

Supply chain coordination through contracts has been a burgeoning area of re- search in recent years. In spite of rapid development of research, there are only a few structured analyses of assumptions, methods, and applicability of insights in this field. The aim of this paper is to provide a systematic overview of coordinating contracts in supply chain through highlighting the main concepts, assumptions, methods, and present the state-of-the- art research in this field

Stability and Endogenous Formation of Inventory Transshipment Networks

This paper studies a cooperative game of inventory transshipment among multiple firms. In this game, firms first make their inventory decisions independently and then decide collectively how to transship excess inventories to satisfy unmet demands. In modeling transshipment, we use networks of firms as the primitive, which offer a richer representation of relationships among firms by taking the coalitions used in all previous studies as special cases. For any given cooperative network, we construct a dual price allocation under which the network is stable for any residual demands and supplies in the sense that no firms find it more profitable to form subnetworks. Under the allocation based on the marginal contribution of each firm to its network (called the MJW value), we show that various network structures such as complete, hub-spoke, and chain networks are stable only under certain conditions on residual amounts. Moreover, these conditions differ across network structures, implying that a network structure plays an important role in establishing the stability of a decentralized transshipment system. Finally, we consider the case when firms establish networks endogenously, and show that pairwise Nash stable networks underperform the corresponding networks in centralized systems. </jats:p

Backup capacity coordination between renewable and conventional power suppliers under renewable portfolio standard regulation

This dissertation studies the impacts of renewable portfolio standard (RPS) regulation on regional electricity markets, and the backup capacity coordination mechanisms between renewable and conventional power suppliers with tradable green certificate (TGC) offering.Firstly, we consider a regional market with renewable capacity and access to the TGC market. We establish a monopoly model and a duopoly model. We find that the green power output decreases when the RPS percentage increases in a regional market. When the TGC price increases, the green power output increases, and the total profit first decreases then increases. There exists an optimal RPS percentage to maximize the social welfare. By numerical analysis, we show that when the TGC price increases, the electricity outputs change slower in the duopoly market.Secondly, we study a capacity coordination mechanism in a single region market. The intermittent nature of the renewable supplier results in random power shortage. Though a conventional supplier can prepare backup capacity to cover the shortage, there is no commitment that enough backup capacity will be prepared without any incentives to the conventional supplier. We design a coordination mechanism where the renewable supplier offers the conventional supplier free TGC proportional to the backup capacity. This mechanism coordinates the conventional supplier's decision on backup capacity and arbitrarily splits the system profit between the two suppliers by the wholesale price.Thirdly, we design a coordination mechanism in a two-regional market with interregional transmission. The renewable suppliers offer TGC and pay transmission premium to encourage the conventional suppliers prepare enough backup capacities. The conventional suppliers decide the interregional transmission prices between them. This mechanism coordinates the system and achieves the global optimum. In contrast, an uncoordinated baseline case leads to under investment of backup capacity and the system profit is less than the global optimum. In the coordination model, when the transmission cost increases, the backup capacity in a region increases if this region is a net importer of backup power, or decreases if it is a net exporter

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

Optimal transshipments and reassignments under periodic orcyclic holding cost accounting

Cataloged from PDF version of article.In a centrally managed system, inventory at a retailer can be transshipped to a stocked-out retailer to meet demand. As the inventory at the former retailer may be demanded by future customers of that retailer and transshipment time/cost is non-negligible, it can be more profitable to not transship in some situations. When unsatisfied demand is backordered, reassignment of inventory to a previously backordered demand can perhaps become profitable as demand uncertainty resolves over time. Despite this intuition, we prove that no reassignments are necessary for cost optimality under periodic holding cost accounting in a two-retailer system. This remains valid for multi-retailer systems according to numerical analyses. When holding costs are accounted for only at the end of each replenishment cycle, reassignments are necessary for optimality but insignificant in reducing the total cost. In most instances tested, the decrease in total cost from reassignments is below 2% for end of cycle holding cost accounting. These results simplify transshipment policies and facilitate finding good policies in both implementation and future studies, as reassignments can be omitted from consideration in optimization models under periodic holding cost accounting and in approximation models under cyclical cost accounting

Behavioral analyses of retailers’ ordering decisions

The main objective I pursue in this thesis is to better understand how different factors may independently and in combination influence retailers' ordering decisions under different supply chain structures (single agent and multi agent), different demand uncertainty (deterministic and stochastic), and different interaction among retailers (no interaction, competition and cooperation). I developed three different studies where I build on different formal management model and then run multiple behavioral studies to better understand subjects’ behavior. The first study analyzes order amplification in a single-supplier single-retailer supply chain. I used a behavioral experiment to test retailers’ orders under different ordering delays and different times to build supplier’s capacity. Results provide (i) a better understanding of the endogenous dynamics leading to retailers’ ordering amplification, and (ii) a description of subjects’ biases and deviation from optimal trajectories; despite subjects have full information about the system structure. The second study analyzes how order amplification can also take place when there is fierce retailer competition and limited supplier capacity. I study how different factors (different time to build supplier capacity, different levels of competition among retailers, different magnitudes of supply shortage and different allocation mechanisms) may independently and in combination influence retailers’ order in a system with two retailers under supply competition. Results show that (i) the bullwhip effect persists even when subjects do not have incentives to deviate, (ii) subjects amplify their orders in an attempt to build an unnecessary safety stock to respond to potential deviations from the other retailers, and (iii) retailers’ underperformance varies with the allocation mechanism used by the supplier. In the last study, I analyze retailers’ orders in a system where there is uncertainty in the final customer demand. I experimentally explore the effect of transshipments among retailers in a single-supplier multi-retailer supply chain. Specifically, I explore retailers’ orders under different profit and communication conditions. In addition, I integrate analytical and behavioral models to improve supply chain performance. Results show that (i) the persistence of common biases in a newsvendor problem (pull-to-center, demand chasing, loss aversion, psychological disutility), (ii) communication could improve coordination and may reduce demand chasing behavior, (iii) supply chain performance increases with the use of behavioral strategies embedded within a traditional optimization model, and (iv) dynamic heuristics improve overall coordination, outperforming a simple Nash Equilibrium strategy

Transshipment in supply chain networks with perishable items

Supply chain management is an efficient approach to managing the flow of information, goods, and services in fulfillment of customer demand. The implementation of supply chain management significantly affects the cost, benefit level, and quality. Over the past decades, multiple strategies for effective supply chain management have been developed in both academia and industry. One such strategy is named lateral transshipment which allows movement of stock between locations at the same echelon level or even across different levels. Although transshipment has been considered in the literature for a long time, there has been limited studies of transshipment for perishable items, most likely because of the complex structure of perishable inventories. The analysis of perishable-inventory systems has been considered in numerous articles because of its potential application in sectors such as chemicals, food, photography, pharmaceuticals, and blood bank management. Blood services in Australia rely on voluntary, non-remunerated donors to satisfy the demand for blood. Blood services confront ongoing challenges in providing an adequate supply of blood and blood products. One of the powerful tools that could improve the efficiency of the blood supply chain is lateral transshipment. This thesis presents three models that have application in the transshipment of perishable items such as blood. The first model (presented in Chapter 2) outlines the development of a new transshipment policy for perishable items, to enhance supply chain performance. A Poissondistributed customer demand is assumed and the effect of reactive transshipment on expected costs are evaluated. A heuristic solution is developed, using partial differential equations to compute performance measures and cost function. The performance of this model is evaluated through a numerical study. The results indicate that this transshipment policy is effective under lost-sale and backordering scenarios. In addition, the performance of the suggested transshipment policy is compared with the current transshipment policy that is practiced in some Australian hospitals. The results suggest that by setting the optimal threshold, a significant cost saving could be obtained with the same average issuing age of the current policy. The second model (presented in Chapter 3) considers a finite-horizon multi-period inventory system with one main hospital connected to several smaller hospitals. The hospitals face random demand and small hospitals are allowed to transship to the big hospital to mitigate their wastage. The problem is formulated as an infinite-horizon dynamic programming model. The objective of this model is to determine an optimal ordering and transshipment policy that minimizes the total expected cost. An approximate dynamic programming (ADP) model is used to approximate the value function with a linear combination of basis functions, using column generation to cope with the course of dimensionality. The numerical results suggest that considerable cost saving can be achieved by using an ADP model. The third model (presented in Chapter 4) proposes a proactive transshipment policy for a network of hospitals with uncertain demand. At the beginning of each review period, each hospital makes decisions on the quantity to order from a central blood bank and to transship to other hospitals. The problem is formulated as a two-stage stochastic programming model where the Quasi-Monte Carlo (QMC) sampling approach is used to generate scenarios and the optimal number of scenarios is determined by conducting stability tests. The performance of the developed model is evaluated through numerical experiences. The numerical results indicate significant potential cost savings in comparison with the current policy in use and the no-transshipment policy

A distributed predictive control approach for periodic flow-based networks: application to drinking water systems

This paper proposes a distributed model predictive control approach designed to work in a cooperative manner for controlling flow-based networks showing periodic behaviours. Under this distributed approach, local controllers cooperate in order to enhance the performance of the whole flow network avoiding the use of a coordination layer. Alternatively, controllers use both the monolithic model of the network and the given global cost function to optimise the control inputs of the local controllers but taking into account the effect of their decisions over the remainder subsystems conforming the entire network. In this sense, a global (all-to-all) communication strategy is considered. Although the Pareto optimality cannot be reached due to the existence of non-sparse coupling constraints, the asymptotic convergence to a Nash equilibrium is guaranteed. The resultant strategy is tested and its effectiveness is shown when applied to a large-scale complex flow-based network: the Barcelona drinking water supply system.Peer ReviewedPostprint (author's final draft

Co-management and Traditional Fisheries: The Case of Fante Fishers in Elmina, Ghana

Co-management has widely been recognized as an alternative approach to addressing natural resource crises and diverse environmental concerns. In line with this, the Ghanaian fishery sector introduced co-management as an institutional approach to manage natural resources. However, studies still reiterate that, the traditional fishery sector is still in decline, which have affected the livelihood of communities that depends on the resource and resulted in Ghana becoming a net importer to meet the country’s fish requirements, which is likely to increase due to the growing population. The aim of this study therefore is to understand the factors contributing to the decline of the sector despite the adoption of co-management. Following a qualitative approach, the study involved Fante fishers in Elmina to understand how co-management have influenced traditional fishing. The study further seeks to identify constraints that impede the successful implementation of co-management. By exploring the economic, social and environmental impacts of co-management, divergent issues were raised from respondents. Research findings reveals that weak institutional framework, lack of active participation, empowerment and trust as the challenges that contributes to the underperformance of co-management. From discussions and analysis, general lessons and recommendations are drawn from the study