Abstract
This paper studies a flexible ordering policy among a manufacturer and a supplier with random yield and demand uncertainty, where the order quantity lies between the minimum and the maximum quantity. We first determine the optimal flexible ordering policy and the corresponding raw material production quantity that maximize expected profit of the centralized supply chain, and find that our flexible ordering policy can significantly enhance the supply chain's expected profit compared to an invariable ordering policy. Then we analyze the decentralized scenario and propose a revenue sharing policy with an order penalty and rebate (OPR) contract to fully coordinate the supply chain. Finally, numerical examples are given to illustrate the results. © 2013 Elsevier B.V.
| Original language | English |
|---|---|
| Pages (from-to) | 686-693 |
| Journal | International Journal of Production Economics |
| Volume | 146 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - Dec 2013 |
| Externally published | Yes |
Bibliographical note
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].Research Keywords
- Combined contract
- Flexible ordering policy
- Supply chain coordination
- Uncertainty
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