Centralized Supply Chain Research Articles

Pricing policies for printed and electronic books in a triple-channel supply chain

Purpose This study aims to investigate the pricing dynamics within a triple-channel supply chain. The publisher can sell printed books (p-books) through bookstores or online direct sales, and electronic books (e-books) are sold directly through the internet. The primary objectives include determining optimal wholesale and final prices for p-books, assessing the profitability of introducing e-books, comparing profits across channels and supply chain modes and identifying optimal demand volumes. Design/methodology/approach The research uses first-order derivatives and the Stackelberg game to analyze the pricing strategies. Two supply chain modes, centralized and decentralized, are considered, and various parameters are examined to understand their impact on prices, demand volumes and final sales profit. Findings The results indicate that the e-book is either not published or is introduced simultaneously with the printed version in both modes. In the decentralized mode, the wholesale price of a p-book is equivalent to the final price in the bookstore channel in the centralized mode. One channel among the three selling channels is used to maximize the total profit in the centralized supply chain, whereas all demand should be fulfilled through either online direct sales or e-book channels in the decentralized mode. Originality/value This paper introduces a comprehensive triple-channel book supply chain model, considering cross-price sensitivities and lag times for e-books. The study provides insights into the dynamics of the book industry and compares them with existing literature, contributing to a broader understanding of the pricing strategies in a triple-channel context.

Assessing cap-and-trade regulation's impact on dual-channel green supply chains under disruption

The rise of online shopping has intensified focus on the dual-channel supply chain, highlighting the need to balance profitability and eco-friendliness under competition and disruptions. This study investigates how cap-and-trade regulations affect the performance of a dual-channel green supply chain amidst disruptions. It explores the interplay between pricing and greening strategies under cap-and-trade conditions and varying market demand disruptions. The model features a Stackelberg game between a manufacturer of eco-friendly products and a retailer, applied to both centralized and decentralized systems. Findings reveal that cap-and-trade regulations affect centralized and decentralized supply chains differently. Centralized systems show higher sensitivity in greenness levels to disruptions compared to decentralized ones. Lower greening cost coefficients lead to higher greenness levels in both models, but centralized systems outperform decentralized ones when cap-and-trade regulations are absent. However, the performance of centralized systems deteriorates significantly during severe disruptions, whereas decentralized systems maintain profitability growth. Additionally, the study finds that increased greening costs reduce the optimal greenness level, impacting wholesale and sale prices. Centralized supply chains exhibit greater variability in carbon emissions and profits under disruption conditions, while decentralized systems show more stability and higher profitability, particularly in severe disruptions. The findings also indicate that a dynamic cap-and-trade system can enhance adaptability and efficiency in managing emissions during disruptions.

Impact of Quality Investment and Vertical Shareholding in Hybrid Competing Supply Chains

Product quality is a key factor affecting consumers’ willingness to buy, providing greater advantages to an enterprise than product price. This paper investigates the impact of two factors, price and quality, on the operational decisions of hybrid competing supply chains. Supply chain I, which consists of a manufacturer and a retailer, is a decentralized structure. Supply chain II, where the manufacturer and retailer are integrated, is a centralized structure. Quality investment and vertical shareholding are introduced into the decentralized supply chain. Models are constructed for three different scenarios, examining whether the manufacturer makes a quality investment and whether the retailer holds shares in the quality investment. By comparing the equilibrium results, solved by the Stackelberg game method, the following conclusions are drawn: (1) Quality investment and shareholding can enhance product quality and price. (2) The retail price in a centralized supply chain is consistently lower than that in a decentralized one, leading to generally higher total profits for centralized supply chain. (3) The total profit of the decentralized supply chain only exceeds that of the centralized ones when the degree of substitution between products is lower than 0.6285 and the quality effort cost factor is within a specific range. While centralized supply chain is generally more advantageous, decentralized supply chain can outperform him under specific conditions.

Enhancing supply chain relationships in the circular economy: Strategies for a green centralized supply chain with deteriorating products

This article introduces a green centralized supply chain in a two-stage stochastic programming model using deteriorating products. The model reduces the cost of purchasing, transporting, storing, product recovery and shortages. This cuts down on greenhouse emission related to transportation, product recovery, and recycling programs. On the basis of this, we explore the utilization of the circular economy to the damages that could occur from used products. Furthermore, revenue sharing and quantity discount contracts are examined in the business models between the members of the supply chain and the external manufacturer. Demand is assumed to be uncertain, and scenarios are created to account this. The model specifies the optimal order quantities, transportation modes and contract terms that minimize costs and environmental impacts. Numerical examples analyze the trade-offs between economic and environmental objectives under different supply chain parameters. The results provide insights for circular supply chains that reconcile economic incentives with environmental responsibility for deteriorating product.

Product line strategy and supply chain structures for mass customized production using 3D printing

We develop game-theoretical models to capture unique features: design freedom, natural flexibility, and quality distinction of 3D printing, and propose the customization degree and unique labour division for 3D-printed products. We investigate a manufacturer’s product line strategy with 3D printing. The manufacturer can offer single standardized products (strategy S), single 3D-printed products (strategy T), or both products (strategy L) to consumers through its retailer. We further explore how supply chain structures influence the manufacturer’s product line strategy. We find (i) the optimal customization degree of 3D-printed products is lower under strategy L than strategy T. (ii) When the development cost of 3D-printed products is low/relatively low/moderate/high and the utility from product fit is high/moderate/relatively low/low, the manufacturer adopts strategy L/T/L/S. (iii) The retailer expects the manufacturer to adopt strategy T or L. (iv) In the centralised supply chain, the manufacturer prefers strategy L to T when the development cost of 3D-printed products is low. Moreover, the centralised supply chain is inferior to the manufacturer when the utility from product fit is low under strategy T and when the marginal development cost is intermediate under strategy L. We provide managerial insights for designing mass-customized products and product lines using 3D printing.

Cause marketing decisions in supply chains: cause effect and marketing effect

This paper studies a cause marketing (CM) design problem incorporating donation amount, marketing expenditure, and product pricing as decision variables in a manufacturer-retailer supply chain context. We investigate five CM decision models: centralized supply chain conducting CM (Model C), manufacturer conducting CM (Model M), retailer conducting CM (Model R), manufacturer leading CM collaboration (Model MC), and retailer leading CM collaboration (Model RC). The models incorporate not only the ‘cause effect’ of consumers' increased willingness to purchase but also the ‘marketing effect’, meaning the market-base expansion associated with marketing efforts in a CM campaign. A key insight is that CM should never be adopted in the absence of marketing effect but can be adopted in the absence of cause effect. Comparing different models reveals that there can be consistency or conflict in CM mode choice among supply chain members. It is also found that an influencing parameter in CM collaboration is the allocation proportion of marketing expenditure rather than that of donation amount. These results indicate that the marketing effect, which has long been neglected in the literature, is a driving factor for firms to conduct CM, and the impact of corresponding marketing efforts should be emphasised.

National Survey of FACT-Accredited Cell Processing Facilities: Assessing Preparedness for Local Manufacturing of Immune Effector Cells

The utilization of the human immune system as a therapeutic modality has materialized in the form of novel biologics known as immune effector cells (IECs). However, currently approved IECs rely on autologous cells for manufacturing that are funneled through costly centralized supply chains leading to long wait times and potentially increased mortality. Alternative models for manufacturing at or near the point-of-care in a distributed and local approach are being proposed to overcome such a bottleneck. Cell processing facilities for minimally manipulated products, as well as academic good manufacturing practice facilities, are being considered for such manufacturing tasks. However, the infrastructure and the practices of these facilities remains unstudied. Here, we surveyed the cell processing facilities accredited by the Foundation for Accreditation of Cellular Therapy (FACT) in the United States to better understand their preparedness for local manufacturing of IECs. A structured survey consisting of 40 items was distributed to the directors of 157 facilities. The survey evaluated 6 domains, including facility characteristics, quality practices, personnel, use of automation, experience with IECs, and the perception of the point-of-care model. Thirty-eight facilities completed the survey (24.2%). Most facilities were involved in handling IEC products (35/38, 92.1%), and the majority had infrastructure to support basic operations and quality control such as viability (36/36, 100%), identity (33/36, 91.7%), and sterility (33/36, 91.7%). The quality practices varied among the facilities depending on the types of products processed. A slight majority implemented automation in their workflows (22/38, 57.9%). Facilities expressed a general interest in adopting point-of-care models (23/38, 61%), with financial and human resources identified as the most significant constraints. In conclusion, FACT-accredited cell processing facilities may provide the infrastructure required for local manufacturing. However, there is a need for standardization and minimum quality requirements to effectively implement such models.

Redesigning product line for integrated manufacturer-supplier ecosystem in a centralized supply chain: Case of an industrial consumer product

To produce quality products rapidly to derive competitive advantage, the original equipment manufacturer (OEM) must work closely with its suppliers in product redesign processes. Previous literature has emphasized that quality products can be produced effectively and will provide better customer service if product redesign is performed considering the broad OEM-supplier(s) ecosystem. To this end, we seek to develop a mathematical model focused on maximizing the objectives of the OEM-supplier(s) ecosystem considering a centralized supply chain in such a manner that operational-level financial objectives are mapped in terms of product line design decisions and attribute-level assignments. By including operational-level supply chain considerations such as service levels and consumers' preferences, we seek to capture key aspects related to customers’ requirements. This research links product-level technical decisions with enterprise-level business objectives, thus bridging engineering and enterprise-level financial nuances. The problem for the manufacturer pertains to the minimization of the manufacturing cost and maximization of the product premium. The problem for the suppliers pertains to maximization of salvage value, minimization of shortage cost, and maximization of sales revenue. These two problems are then sewed together, and a chemical reaction optimization (CRO) based solution methodology has been deployed. To solve and analyze the devised problem, a case study based on an industrial consumer product is conducted. We evolve a comprehensive mathematical framework that mimics the facets related to product line redesign encapsulating considerations pertaining to functional level design, supply chain dimensions, and manufacturer-supplier profitability. Several novel findings are reported based on the study. For instance, we demonstrate that product configurations for respective segments after the redesign process are contingent upon the service level. Further, we demonstrate that in the industrial consumer product market, higher profit for the OEM-supplier(s) ecosystem is achieved at a slightly lower service level as opposed to a higher theoretical service level. The study has important implications for design and product management.

Using a smart contract for the floral supply chain

The floral supply chain is one of the most delicate logistics networks in existence, requiring intensive monitoring of temperature, humidity, and product conditions to ensure the quality of flowers. However, the traditional centralized supply chain involves exchanging information back and forth, and therefore wastes time, money, and resources. In addition, centralized data control without security verification exposes logistics information to the risk of hacking, information tampering, and counterfeiting.Blockchain technology offers decentralization, immutability, and encryption security. Furthermore, application of Internet of Things (IoT) technology has made it easier to monitor goods and the distribution process. Combining the above two new technologies can effectively improve the transparency and traceability of the floral supply chain and make transactions more secure through the digital signature verification process. In this research, we propose a smart contract for the floral supply chain. Through contract compilation, the proposed contract defines the delivery process status, delivery specifications, and other conditions in the shipping process so that the status of the goods is updated on the blockchain, giving the supply chain higher traceability. This study also defines the process for and conditions of money transactions between buyers and sellers using such smart contracts, thereby automating the transaction, improving its efficiency, and saving on labor costs and paper waste. This research also compares the proposed smart contract to traditional transaction methods. The pros and cons are thoroughly discussed, offering significant benefit to decision makers.

Enhancing supply chain efficiency through blockchain technology: A centralized multidistributor and multi-retailer approach

Blockchain technology has emerged as a transformative solution for supply chain management, offering a myriad of benefits to the industry. This paper explores the potential benefits of incorporating blockchain technology into supply chain management to enhance security and trustworthiness. We present a centralized supply chain system comprising a single manufacturer, multiple distributors, and multiple retailers. Geographical divisions have been assumed among distributors, each catering to a specific area with its own set of retailers. Mathematical expressions are developed to determine the optimal replenishment policies for the manufacturer, distributors, and retailers. Numerical examples are provided to illustrate the results, and sensitivity analysis is conducted to assess the model's responsiveness to parameter variations. Finally, managerial insights are discussed, shedding light on the implications and advantages of the proposed blockchainbased supply chain management system.

Analysis of Carbon Footprint Reduction in Supply chains using Blockchains

Integrating carbon footprint reduction into contemporary supply chain networks necessitates strong cybersecurity and data integrity protocols to safeguard communication infrastructures against threats. This study examines the use of blockchain technology as a cybersecurity and traceability framework in supply chain systems, using simulated data that represents logistical information, shipping quantities, carbon emissions, and blockchain transactions. An investigation indicates varied carbon-emitting mechanisms, with air freight exhibiting the greatest emissions and rail transit the lowest. Transportation nodes in Supply varying emission rates, with urban distribution centres generating more emissions than rural logistics hubs, underscoring disparities in carbon footprints across different areas. Moreover, risks such data breaches, illegal access, and cyberattacks underscore the fragility of centralized supply chain systems. Blockchain transactions exemplify secure and transparent exchanges throughout all of the supply chain, highlighting blockchain’s capacity to provide safe and verifiable monitoring of carbon emissions inside the network. This research Supply the potential of blockchain technology to diminish carbon footprints in supply chains, emphasizing its ability to enhance data security, authenticate carbon emission assertions, and augment traceability. The findings highlight the need for customized cybersecurity frameworks for Supply demonstrate blockchain’s capacity to improve the transparency, security, and sustainability of global supply chain operations.

Analysis of Walmarts Marketing Strategy in the Context of New Retail

With continuous innovation and wide application of technologies such as the Internet and big data, the Internet economy has flourished, laying the foundation for the transformation of physical retailing to new retailing. The main advantage of new retailing lies in the combination of the quality experience of physical stores with the high efficiency of online retailing, which points the way for the development of the retail industry. Taking Walmart Company, a world-renowned retail industry giant, as a case study, the paper adopts the 7PS marketing mix theory to study the current marketing situation of Walmart Company. The research found that Walmart has problems such as unreasonable packaging and display of some products and an inefficient logistics supply chain. To this end, this paper proposes optimization solutions including the improvement in product quality, the investment in intelligent information technology, and the construction of a centralized supply chain management model.

Dynamic pricing vs. pre-announced pricing in supply chain with consumer heterogeneity

Dynamic pricing and pre-announced pricing are prevalent operational strategies in practice. In this paper, we develop a two-period game-theoretical model to investigate the retailer’s pricing strategy choice facing informed and uninformed consumers. Our analysis shows that in the centralized supply chain, when the fraction of uninformed consumers is small and the level of consumer patience is moderate, the retailer prefers to adopt pre-announced pricing strategy; otherwise, the retailer prefers to adopt dynamic pricing strategy. Our analysis also reveals that adopting either pricing strategy can simultaneously increase the retailer’s profit and consumer surplus under certain conditions. In addition, our analysis suggests that in the decentralized supply chain, the dynamic pricing strategy adopted by the manufacturer and the retailer can benefit themselves and consumers, resulting in a win-win-win situation.

Centralized supply chain network optimization with UAV-based last mile deliveries

This paper proposes a centralized supply chain network optimization model that maximizes the total profit obtained by a company that produces and/or outsources production, stores, ships and sells products to customers using a fleet made up of trucks and, in the last mile, also of drones. The model includes realistic features of unmanned aerial vehicles (UAVs) in the form of drones with fundamental limitations such as low battery capacities and short delivery ranges. The constrained nonlinear optimization problem is formulated as a variational inequality. Existence and uniqueness results for the solution of the variational inequality are provided along with the results of detailed numerical simulations that emphasize the advantages of the use of a hybrid fleet from enhanced profits to reduction in air pollution. Our quantitative results reveal great promise and insights for the logistics industry in the use of emerging UAV technologies for last mile parcel deliveries as a practical solution within a holistic supply chain network context.

Customer segmentation, pricing, and lead time decisions: A stochastic-user-equilibrium perspective

Multiple price/lead time options are often used as a competitive tool in supply chain operations when customers have heterogeneous price and lead time preferences. We study a two-echelon supply chain network consisting of manufacturers and retailers facing customers that differ in their price- and time-sensitivity. We examine how many price/lead time options should be provided by manufacturers and retailers under decentralized and centralized supply chain management with time-cost tradeoffs. We adopt a stochastic-user-equilibrium (SUE) approach in a supply chain network by incorporating discrete choice theory and using a multinomial logit-based variational inequality to express equilibrium conditions. This is one of the first papers to study time-cost tradeoffs in a supply chain network by introducing an SUE approach. One critical part of our analysis is the establishment of concavity of profit functions, which allows for analytical derivation of the equilibrium strategies. Another critical part of our analysis is the development of SUE conditions in decentralized and centralized supply chain networks. We demonstrate that the variance of heterogeneous customers’ time-sensitivity distribution plays a crucial role in customer segmentations in a time-cost tradeoff supply chain. We find that under SUE conditions, there exists a unique equilibrium in the decentralized and centralized supply chain networks, respectively. We conduct comparative statics analyze to demonstrate the effect of SUE and UE conditions and the influence of decentralized versus centralized supply chain management paradigms. We show how the SUE approach can be applied to supply chain network management with time-cost tradeoffs. Our approach can be extended to other tradeoff decision problems in supply chain network management, especially those in which customers are heterogeneous.

A four-echelon supply chain inventory model for growing items with imperfect quality and errors in quality inspection

To safeguard the livelihood of consumers, food producers are required, either by law or regulatory bodies, to inspect their products for quality before selling the products to consumers. This is because food processing, as is the case with most production systems, is not perfect and there is a possibility that some of the processed products do not meet the required quality standard. Likewise, the inspection process is seldom perfect, meaning that it is subject to errors and thus, some of the processed products might be incorrectly classified. In light of this, an inventory model for a four-echelon food processing supply chain is developed. The supply chain has a farming echelon where live items are grown with the possibility that some of them might not survive; a processing echelon where the live items are transformed into processed inventory; an inspection echelon where the processed inventory is classified into good and poorer quality classes under the assumption that the inspection process is subject to type I and type II errors; and a retail echelon where the processed inventory of good quality is sold to consumers. The supply chain is modelled as a profit maximisation problem and a solution procedure for solving the model is proposed. The problem is studied under both centralised and decentralised supply chain structures and from the analysis, the centralised supply chain with a profit-sharing agreement performs better in terms of profit maximisation.

Pricing and inventory decision in a two-layer supply chain under the Weibull distribution product deterioration: an application of NSGA-II

Academicians and practitioners have focused a lot of attention on the separate issues of pricing and inventory control in a competitive setting. However, integrating these choices in a competitive environment has received scant attention for deteriorating inventory systems from academics despite being crucial to practitioners. From this perspective, our research focuses on designing a supply chain model with inventory coordination to reflect time systems with improved accuracy and optimal control systems. In this research, we develop a two-layer supply chain model consisting of one manufacturer and one retailer incorporating the inventory classification of the retailer. Price-sensitive market demand and two-parameter time-varying Weibull distribution deterioration have been assumed to develop the mathematical model. First, a collective decision on price and inventory control of a deteriorating product has been evaluated in a duopoly environment. Secondly, to explore the decentralized scenario, we have proposed the NSGA-II algorithm to solve the bi-objective programming problem of the two-layer supply chain. The paper aims to explore product collaborative pricing policies and the inventory decision of the deteriorating item in two-layer supply chain coordination. Finally, numerical research is conducted to execute the centralized supply chain and NSGA-II application in a decentralized supply chain. The research findings can provide valuable insights for members of the two-layer supply chain to make optimal product pricing and inventory scheduling decisions.

Inventory Policies and Supply Chain Coordination under Logistics Route Disruption Risks

Predictable logistics disruptions due to scheduled lockdowns for large-scale events such as the Olympic Games may not only reduce supply chain profits, but also increase carbon emissions. To help solve these problems, an emergency transit policy to be applied to the logistics path is an effective solution. However, optimal inventory control is needed. This paper proposes an optimization model to control ordering and inventory policies for decentralized and centralized supply chains. The model considers the logistics path damping coefficient, the logistics path acceleration coefficient, and the vehicle loading capacity ratio in emergency transit. Our major findings include the following. First, supply chain profits under centralization are confirmed to be higher than under decentralization. Second, a price discount mechanism can achieve supply chain coordination. Third, the manufacturers in a centralized supply chain are more inclined to choose a logistics path with a high acceleration coefficient in order to let their cargo arrive quickly and to reduce the impact of the lead time demand fluctuations. Finally, the implications of our research results for carbon emission reductions are discussed.

The effects of subsidy programs in byproduct synergy operations

Byproduct synergy (BPS) is an innovative waste disposal approach. Waste resulting from manufacturers’ production processes is disposed of at processing plants and converted into a recycled byproduct. To reduce the inefficiency of a decentralized supply chain and enhance BPS operations, we consider a subsidy program scheme and analyze different supply chain scenarios: a centralized supply chain without subsidies and a decentralized supply chain with or without subsidies. We discuss different policymaker objectives (i.e., concerned only with social welfare and concerned with both social welfare and environmental impacts). Our results show that when the policymaker cares only about social welfare, the subsidy program always enhances BPS operations. The subsidy program brings more prime products when the BPS’s relative market value is high and less emissions are produced when the BPS’s relative market value is low. When the policymaker cares about both social welfare and environmental impacts, the subsidy program can enhance BPS operations unless the market values of BPS and the prime product are relatively low. Moreover, when the market value of BPS is medium high and the market value of the prime product is low, the policymaker can reduce production emissions by motivating the manufacturer to reduce production quantity of the prime product and encouraging the plant to reduce BPS capacity. When the market value of BPS is low, the policymaker can reduce emissions through efficient production process by only motivating the plant to enhance BPS capacity.

Optimal supply chain networks for waste materials used in alkali-activated concrete fostering circular economy

Global objectives to mitigate climate change stimulate transformations within construction sector. Alternative binders to carbon-intensive cement are being researched, including alkali-activated materials. However, barriers preventing adaptation of developed solutions include the absence of supply chains and lack of collaborations between waste producers and concrete manufacturers. We propose a methodological framework that combines geospatial analysis and life cycle assessment with linear optimization model to identify the most optimal supply chain networks for waste materials, focusing on transportation between the actors. Two types of waste generated in Switzerland were examined as case studies, one with distributed source locations, such as ashes produced at municipal waste incinerators, and another with scattered source locations, such as mineral wool insulation waste from construction and demolition activities. Results show that direct symbiosis between waste producers and concrete manufacturers results in 68% and 63% lower CO2 emissions and costs of transportation for ashes and mineral wool waste respectively, compared to cement transportation for conventional concrete production. However, considering investment costs, decision-makers might support the centralized supply chain network design.