Supply Chain Coordination with Quantity Discount for Seasonal Demand

Coordination between manufacturers and multiple buyers represents an important problem in supply chain management. In this paper, we develop a supply chain coordination mechanism in a system with a dominant manufacturer that delivers seasonal products to a group of buyers. These buyers have common replenishment times and receive delivery through a common delivery channel. A twice-stage ordering and production system is introduced in which the first order is placed at some time in advance of the selling season and a second order is placed closer to the selling period. This reorder strategy allows the buyer to collect additional information about seasonal demand, thereby reducing demand forecast error and simultaneously smoothing out production time. This twice-stage model results in savings for both manufacturer and the buyers. Strategies for developing sustainable cooperation between manufacturers and buyers are discussed in light of the conclusions of this model

How is Supply Chain Visibility Affecting SME's Operating in International Supply Chains?

Supply chain visibility is generally seen as a positive attribute for individual supply chain partners and the supply chain as a whole. There is limited research on how increasing levels of supply chain visibility can impact individual organizations, particularly smaller entities (SME's). This paper uses an Australasian SME (Orion) as a case study to investigate how increasing visibility is affecting them and the way they operate within international supply chains. The results indicate that increasing visibility can pose significant challenges and potentially negative consequences for smaller organizations. In addition to the extra resources required and complexity for the SME itself, diverging expectations and a lack of trust between supply partners can negatively impact on supply chain relations and long term supply chain innovation. Within the supply chains Orion operates, increasing visibility does not appear to be leading to improvements in collaboration, risk sharing or shared goals. Viewed through the lens of Michael Porter's five forces model Orion is in a precarious environment, although there remain options for increased visibility to be used to Orion's advantage

The Impact of Information Sharing on Different Performance Indicators in a Multi-Level Supply Chain

Enterprises can use different methods/principles to obtain competitive advantages. Information sharing (IS) among supply chain (SC) partners is also one of these methods used in enterprises and it has positive effects on overall system performance like reduced inventory level, decreased cost, bullwhip effects and increased profit. In this paper, our aim is to present the impacts of IS on different costs like ordering, holding and penalty costs of each SC member and total system costs in multi SC. We want to show the effects of sharing different types of information simultaneously or separately on SC partners as cost change. Besides, this paper presents the situation of order quantity estimation according to the proximity of actual order quantity in decentralized or centralized demand sharing. A model is developed to determine IS influence on the cost of SC partners. Various IS scenarios are studied in this paper. The customer demand, warehouse order quantity and warehouse-manufacturer lead time are the shared information of scenarios. Results are tested and analysed by using analysis of variance (ANOVA).The findings of this study show that IS especially simultaneously sharing reduces system costs. Lead time sharing provides the lowest cost between other types of sharing. For every system member, holding cost reduces the most during IS. The more accurate demand forecasting is performed in centralized demand sharing compared to decentralized sharing

A hybrid decision support system for managing humanitarian relief chains

Decisions regarding location, allocation and distribution of relief items are among the main concerns of the Humanitarian Relief Chain (HRC) managers in response to no-notice large-scale disasters such as earthquakes. In this paper, a Hybrid Decision Support System (HDSS) consisting of a simulator, a rule-based inference engine, and a knowledge-based system (KBS) is developed to configure a three level HRC. Three main performance measures including the coverage, total cost, and response time are considered to make an explicit trade-off analysis between cost efficiency and responsiveness of the designed HRC. In the first step, the simulator calculates the performance measures of the different configurations of the HRC under generated number of disaster scenarios. Then, the rule-based inference engine attempts to build the best configuration of the HRC including facilities’ locations, relief items’ allocation and distribution plan of the scenario under investigation based on calculated performance measures. Finally, the best configuration for each scenario is stored in the KBS as the extracted knowledge from the above analyses. In this way, the HRC managers can retrieve the most appropriate HRC configuration in accordance with the realized post-disaster scenario in an effective and timely manner. The results of a real case study in Tehran demonstrate that the developed HDSS is an effective tool for fast configuration of HRCs using stochastic data

Toimittajan hallinnoiman varaston toimivuus varaston täydentämisessä

Tutkimuksen tarkoituksena oli selvittää mitkä tekijät vaikuttavat toimittajan hallinnoiman varaston (VMI-malli) toimivuuteen varaston täydentämisessä. VMI-mallin käyttö liittyy toimitusketjuyhteistyöhön ja tutkimuksen teoriaosassa lähestytään yritysten välistä yhteistyötä luottamukseen, sitoutumiseen, riskien hallintaan ja yhteistyöhön liittyvien teorioiden avulla. Näiden teorioiden pohjalta luotiin tutkimuksen teoreettinen viitekehys. Teoriaosassa käsiteltiin myös toimitusketjun hallintaan liittyviä olennaisia tekijöitä tämän tutkimuksen kannalta. Tutkimuksen empiirinen osio koostuu neljästä teemahaastattelusta. Kolme haastattelua tehtiin eri tavarantoimittajille ja yksi haastattelu tehtiin tukkukaupalle. Tavarantoimittajien edustajille toimitettiin ennen tutkimushaastattelujen tekoa tausta- ja esitietolomake, joka ohjeistettiin palauttamaan haastattelijalle ennen varsinaista haastattelua. Tukkukaupan edustajille vastaavaa lomaketta ei lähetetty. Haastattelut tavarantoimittajien edustajien kanssa suoritettiin vuoden 2013 marras–joulukuun aikana. Tukkukaupan edustajien kanssa haastattelu suoritettiin tammikuussa 2014. Haastatteluin kerätty aineisto analysoitiin teemoittain. Haastattelujen avulla saatujen vastausten perusteella tutkimuksen teoreettista viitekehystä muokattiin vastaamaan paremmin saatuja tuloksia. Tutkimuksen mukaan kaikilla tutkimuksen teoreettiseen viitekehykseen kuuluvilla tekijöillä oli vaikutusta toimitusketjuyhteistyön onnistumiseen ja tässä tapauksessa VMI-mallin toimivuuteen varaston täydentämisessä. Hyvällä kommunikoinnilla, ongelmanratkaisukyvyllä ja luottamuksella toisen osapuolen ammattitaitoon nähtiin olevan suurin merkitys luottamukseen ja sitoutumiseen liiketoimintakumppania kohtaan toimitusketjuyhteistyössä. Kommunikoinnilla ja saatavilla olevan informaation oikeellisuudella nähtiin olevan vaikutusta myös toimitusketjun hallintaan liittyvien riskien vähentämisessä. Yhteistyön lisäämiseen ja edelleen kehittämiseen lisääviä asioita tuotiin esille useassa haastattelutilanteessa. Näiden asioiden toteuttamiseksi tulisi löytää oikeat henkilöt keskustelemaan keskenään miten toimintaa voidaan kehittää. VMI-mallin käytön sopivuudesta varaston täydentämiseen tuli esille selkeät mielipide-erot tavarantoimittajien ja tukkukaupan edustajien välillä. Tutkimuksessa olleet tavarantoimittajien edustajat näkivät VMI-mallin olevan hyvä tapa huolehtia tuotteiden saatavuudesta tukkukaupan puolesta. Tukkukaupan edustajat taas puolestaan näkivät VMI-mallin suurimmalta osin jo vanhentuneena ja tehottomana toimintatapana. Edellä mainittujen mielipide-erojen kaventamiseksi kaivataan toimivaa keskusteluyhteyttä

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