Coordination in a single-retailer two-supplier supply chain under random demand and random supply with disruption

Fei Hu; Cheng-Chew Lim; Zudi Lu; Xiaochen Sun

doi:10.1155/2013/484062

Coordination in a single-retailer two-supplier supply chain under random demand and random supply with disruption

Fei Hu, Cheng-Chew Lim, Zudi Lu, Xiaochen Sun

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

20 Citations (Scopus)

8 Downloads (CityUHK Scholars)

Abstract

This paper studies the coordination issue of a supply chain consisting of one retailer and two suppliers, a main supplier and a backup supplier. The main supplier's yield is subject to disruption and the retailer faces a random demand. We determine the retailer's optimal ordering policy and the main supplier's production quantity that maximize expected profit of the centralized supply chain. We also analyze the decentralized scenario, and a combination of overproduction risk sharing and buy-back contracts with a side payment from/to the backup supplier is provided to coordinate the supply chain. Numerical examples are given to gain some qualitative insights. © 2013 Fei Hu et al.

Original language	English
Article number	484062
Journal	Discrete Dynamics in Nature and Society
Volume	2013
DOIs	https://doi.org/10.1155/2013/484062
Publication status	Published - 2013
Externally published	Yes

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Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

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N2 - This paper studies the coordination issue of a supply chain consisting of one retailer and two suppliers, a main supplier and a backup supplier. The main supplier's yield is subject to disruption and the retailer faces a random demand. We determine the retailer's optimal ordering policy and the main supplier's production quantity that maximize expected profit of the centralized supply chain. We also analyze the decentralized scenario, and a combination of overproduction risk sharing and buy-back contracts with a side payment from/to the backup supplier is provided to coordinate the supply chain. Numerical examples are given to gain some qualitative insights. © 2013 Fei Hu et al.

AB - This paper studies the coordination issue of a supply chain consisting of one retailer and two suppliers, a main supplier and a backup supplier. The main supplier's yield is subject to disruption and the retailer faces a random demand. We determine the retailer's optimal ordering policy and the main supplier's production quantity that maximize expected profit of the centralized supply chain. We also analyze the decentralized scenario, and a combination of overproduction risk sharing and buy-back contracts with a side payment from/to the backup supplier is provided to coordinate the supply chain. Numerical examples are given to gain some qualitative insights. © 2013 Fei Hu et al.

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Coordination in a single-retailer two-supplier supply chain under random demand and random supply with disruption

Abstract

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