Abstract
Four game-theoretical decision models without/with backlogging for the interbasin water transfer (IBWT) supply chain considering water delivery loss under joint pricing and inventory management (JPIM) are first developed, analyzed, and compared; then, the corresponding numerical and sensitivity analyses are conducted and compared; finally, the managerial insights and practical implementations are summarized in this paper. The research results indicate that (1) a revenue and cost sharing contract could effectively coordinate the IBWT supply chain and improve the operational performance of the IBWT supply chain under JPIM; (2) the partial backlogging strategy of water demand could effectively improve the operational performance of the IBWT supply chain under JPIM; (3) coordination strategy with partial backlogging is the best strategy for improving the operational performance of the IBWT supply chain under JPIM; (4) reducing water delivery loss rate and operational costs and increasing backlogging ratio are beneficial to improving the operational performance of the IBWT supply chain under JPIM.
Highlights
To alleviate the shortage of water resources in arid and semiarid areas, various kinds of interbasin water transfer (IBWT) projects have been constructed and operated all over the world, such as the South-to-North Water Diversion (SNWD) Project in China, the California State Water Project, the Central Arizona Project and the Colorado River Aqueduct in the US, the Indira Gandhi Canal and the Telugu Ganga Project in India, the Snowy Mountains Scheme in Australia, the North Sinai Development Project in Egypt, and the National Water Carrier in Israel [1, 2]
In the practical operation management of the IBWT project, the existing rigid water price mechanism for the IBWT project is decoupled from the water supply-demand relationship and cannot effectively exert the regulatory role of the market mechanism and coordinate the interests of all parties involved. us, how to optimize pricing to achieve operational performance improvement under a flexible water price mechanism that is linked to the water supply-demand relationship is an urgent problem for the IBWT projects
Due to the random water demand, the order quantity may mismatch with water demand. e water demand may be lower than the order quantity, and the holding cost of excess water inventory will be incurred; on the contrary, the water demand may be higher than the order quantity, and the shortage cost of excess water demand will be incurred
Summary
To alleviate the shortage of water resources in arid and semiarid areas, various kinds of interbasin water transfer (IBWT) projects have been constructed and operated all over the world, such as the South-to-North Water Diversion (SNWD) Project in China, the California State Water Project, the Central Arizona Project and the Colorado River Aqueduct in the US, the Indira Gandhi Canal and the Telugu Ganga Project in India, the Snowy Mountains Scheme in Australia, the North Sinai Development Project in Egypt, and the National Water Carrier in Israel [1, 2]. Us, how to optimize pricing to achieve operational performance improvement under a flexible water price mechanism that is linked to the water supply-demand relationship is an urgent problem for the IBWT projects. The joint pricing-inventory management decisions and operational strategies for an IBWT supply chain considering water delivery loss and partial backlogging are rarely investigated in the current literatures and practices. Erefore, this paper will try to explore a novelty research issue regarding the operation management of the IBWT supply chain—the joint pricing-inventory management (JPIM) decisions and operational strategies for the IBWT supply chain considering water delivery loss and partial backlogging under random water demand. The related literatures are reviewed first in Section 2; the theoretical modeling notations and assumptions for a generic IBWT supply chain are defined in Section 3; four game-theoretical decision models for the IBWT supply chain without/with backlogging under joint pricing-inventory management (JPIM) are developed, analyzed, and compared in Section 4; the corresponding numerical and sensitivity analyses for all models are implemented, and the corresponding results are compared in Section 5; the managerial insights and practical implementations are summarized in Section 6; the theoretical and practical contributions are summarized
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