Optimal postponement contracting decisions in crowdsourced manufacturing: A three-level game-theoretic model for product family architecting considering subcontracting

Abstract

Crowdsourced manufacturing enables companies to outsource and share manufacturing resources based on demand and capacity across the value chain. A postponement strategy is well recognized as an effective means to deal with supply chain risks and uncertainties of producing customized products. However, coordinated decision-making among product design, postponement contracting and subcontracting is a challenging problem area that requires innovative modeling and decision support. This study develops a model that emphasizes interactive decisions within a three-level non-cooperative game that determines the optimal solutions for a single manufacturer, multiple distributors, and multiple subcontractors by maximizing their net profits. This study formulates a postponement contracting with subcontracting (PCS) problem for product family architecting to interact with postponement contracting and subcontracting decisions based on optimal planning of crowdsourced manufacturing activities. The PCS problem differs from traditional postponement design models that assume a (fixed) product architecture is given at the outset. In this study, interaction among different stakeholders is modeled as a non-linear, mixed-integer, three-level game-theoretic model based on the Stackelberg game theory. A novel virtual postponement structure is introduced to concretize optimization of the PCS problem and to justify which product module(s) should be postponed. Analytical solutions are developed incorporating a nested genetic algorithm. A practical case study of postponement contracting decisions in an electric vehicle company is reported to verify the feasibility and potential of the proposed approach for product family architecting. The optimal product family design, the types of postponed product modules, some parts in the postponed product modules that need to be further subcontracted, and other decision results are determined simultaneously in the case study. The sensitivity analyses on the proposed postponement cost and demand parameters indicate that the changes of their values greatly influence the decision makers’ net profit, and the net profit situation of each decision maker in different regions is obtained by the sensitivity analysis of the union of the two parameters. Thus, the PCS problem for product family architecting in crowdsourced manufacturing provides a more complete solution for the current implementation of the postponement strategy, and our proposed three-level game-theoretic model can handle well the coordination among the PCS problem.