Analysis of the Project Supply Chains: Coordination and Fair Allocation

This research investigates how project contracts can coordinate the supply chain between a project manager and contractor and if the solutions can be ensured as equitable. The main features of this type of supply chain are the trade-offs between the selection of a higher rate of resource consumption with a consequent higher cost to the contractor and a lower rate of resource consumption leading to later delivery and a reduction of the project-reward to the project manager. This broader problem could lead to a coordination problem for the overall supply chain. This research proposed a solution to this broader problem in two different scenarios: Take it or leave it scenario and negotiation scenario. Finally, the fair allocation of the risks and benefits and the related decision-making issues are addressed as one of the behavioural barriers to the supply chain coordination. The coordination issues in a take it or leave it scenario are addressed using time-based and fixed price project contracts using Stackelberg games. Models of coordination were proposed with time-based contracts, but the fixed price contracts failed to coordinate. The coordination problems in negotiation scenario are addressed with the Nash's bargaining, the Kalai Smorodinsky bargaining, and the utilitarian approach. A cost plus contract has been found to dominate the solutions over any cost sharing contract and fixed price contract for Nash's bargaining and Kalai Smorodinsky bargaining cases. Finally, the issues of fairness of allocation of risks and benefits as one of the challenges of supply chain coordination, have been investigated. The fixed price contracts were found to coordinate the supply chain under consideration alongside the time-based contracts if the members had fairness concern. Some of the key features of this research include the incorporation of various probability distributions for the project completion time and cost, the inclusion of various forms of risk preference, and addressing the challenges of fair allocation in project supply chains

Game theoretic optimisation in process and energy systems engineering: A review

Game theory is a framework that has been used by various research fields in order to represent dynamic correlation among stakeholders. Traditionally, research within the process and energy systems engineering community has focused on the development of centralised decision making schemes. In the recent years, decentralised decision-making schemes have attracted increasing attention due to their ability to capture multi-stakeholder dynamics in a more accurate manner. In this article, we survey how centralised and decentralised decision making has been facilitated by game theoretic approaches. We focus on the deployment of such methods in process systems engineering problems and review applications related to supply chain optimisation problems, design and operations, and energy systems optimisation. Finally, we analyse different game structures based on the degree of cooperation and how fairness criteria can be employed to find fair payoff allocations

Fairness in online vehicle-cargo matching: An intuitionistic fuzzy set theory and tripartite evolutionary game approach

This paper explores the concept of fairness and equitable matching in an on-line vehicle-cargo matching setting, addressing the varying degrees of satisfaction experienced by shippers and carriers. Relevant indicators for shippers and carriers in the on-line matching process are categorized as attributes, expectations, and reliability, which are subsequent quantified to form satisfaction indicators. Employing the intuitionistic fuzzy set theory, we devise a transformed vehicle-cargo matching optimization model by combining the fuzzy set's membership, non-membership, and uncertainty information. Through an adaptive interactive algorithm, the matching scheme with fairness concerns is solved using CPLEX. The effectiveness of the proposed matching mechanism in securing high levels of satisfaction is established by comparison with three benchmark methods. To further investigate the impact of considering fairness in vehicle-cargo matching, a shipper-carrier-platform tripartite evolutionary game framework is developed under the waiting response time cost (WRTC) sharing mechanism. Simulation results show that with fairness concerns in vehicle-cargo matching, all stakeholders are better off: The platform achieves positive revenue growth, and shippers and carriers receive positive subsidy. This study offers both theoretical insights and practical guidance for the long-term and stable operation of the on-line freight stowage industry.Comment: 36 pages, 15 figure

The ‘transaction X-ray’: understanding construction procurement

This paper presents the results of a case study, the Construction Case, which examines procurement practices within the UK construction supply chain and compares these with a more general UK sample taken from non-construction sectors. Using a qualitative methodology, the approaches to relationship management and buyer value perception are graphically mapped, using an innovative ‘transaction X-ray’ technique. The Construction Case considers procurement transactions conducted at various points along the construction value chain: the client, the construction firm and the specialist contractor. Recognising that the research design favours a small sample size, and thus limits generalisability beyond the boundaries of the case, the paper finds that construction industry procurement operates in an adversarial and largely arm’s-length manner. While procurement practice is found to share common aspects with other industrial sectors, the case demonstrates that the construction industry is more adversarial and less collaborative than is the average found across the other sectors examined. The paper outlines a useful framework whereby construction practitioners can evaluate elements of procurement practice within their own organisations, and also signposts the required direction for future research in order to reflect the gap, suggested by the case, between current normative theory and construction procurement practice

Dynamic joint investments in supply chains under information asymmetry

Supply chain management involves the selection, coordination and motivation of independently operated suppliers. However the central planner's perspective in operations management translates poorly to vertically separated chains, where suppliers may have rational myopic reasons to object to full in- formation sharing and centralized decision rights. Particular problems occur when a downstream coordinator demands relation-specific investments (equipment, cost improvements in processes, adaptation of components to downstream processes, allocation of future capacity etc) from upstream suppliers without being able to commit to long-term contracts. In practice and theory, this leads of- ten to a phenomenon of either underinvestment in the chain or costly vertical integration to solve the commitment problem. A two-stage supply chain under stochastic demand and information asymmetry is modelled. A repeated investment-production game with coordinator commitment in supplier's investment addresses the information sharing and asset- specific investment problem. We provide a mitigation of the hold-up problem on the investment cost observed by the supplier and an instrument for truthful revelation of private information by using an investment sharing device. We show that there is an interior solution for the investment sharing parameter and discuss some extensions to the work.supply chain management, investment, information

Trust and Information Sharing in Supply Chains

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/91120/1/poms1284.pd

Sustainability and Fairness Simulations Based on Decision-Making Model of Utility Function and Norm Function

We introduced a decision-making model based on value functions that included individualistic utility function and socio-constructivistic norm function and proposed a norm-fostering process that recursively updates norm function through mutual recognition between the self and others. As an example, we looked at the resource-sharing problem typical of economic activities and assumed the distribution of individual actions to define the (1) norm function fostered through mutual comparison of value/action ratio based on the equity theory (progressive tax-like), (2) norm function proportional to resource utilization (proportional tax-like) and (3) fixed norm function independent of resource utilization (fixed tax-like). By carrying out numerical simulation, we showed that the progressive tax-like norm function (i) does not increase disparity for the distribution of the actions, unlike the other norm functions, and (ii) has high resource productivity and low Gini coefficient. Therefore the progressive tax-like norm function has the highest sustainability and fairness