Supply Chain Coordination Mechanism Research Articles

Modeling the Decision and Coordination Mechanism of Power Battery Closed-Loop Supply Chain Using Markov Decision Processes

With the rapid growth of the new energy vehicle market, efficient management of the closed-loop supply chain of power batteries has become an important issue. Effective closed-loop supply chain management is very critical, which is related to the efficient utilization of resources, environmental responsibility, and the realization of economic benefits. In this paper, the Markov Decision Process (MDP) is used to model the decision-making and coordination mechanism of the closed-loop supply chain of power batteries in order to cope with the challenges in the management process, such as cost, quality, and technological progress. By constructing the MDP model for different supply chain participants, this paper investigates the optimization strategy of the supply chain and applies two solution methods: dynamic programming and reinforcement learning. The case study results show that the model can effectively identify optimized supply chain decisions, improve the overall efficiency of the supply chain, and coordinate the interests among parties. The contribution of this study is to provide a new modeling framework for power battery recycling and to demonstrate the practicality and effectiveness of the method with empirical data. This study demonstrates that the Markov decision-making process can be a powerful tool for closed-loop supply chain management, promotes a deeper understanding of the complex decision-making environment of the supply chain, and provides a new solution path for decision-making and coordination in the supply chain.

Literature Review on Decision-Making and Coordination of Closed-loop Supply Chain

Effective treatment and recycling of waste products in the operation of closed-loop supply chain can not only save resources and energy, reduce environmental pollution, but also reduce costs and increase profits for enterprises. All participants in closed-loop supply chain often make decisions with the goal of maximizing overall benefits. This paper aims at summarizing the research progress of decision-making and coordination of closed-loop supply chain, summarizing the factors that affect the decision-making of closed-loop supply chain from the non-economic behavior of decision-makers, green investment, uncertainty, government and policy, and summarizing the commonly used coordination mechanism of closed-loop supply chain, so as to explore the future research direction.

Low-Carbon supply chain optimisation with carbon emission reduction level and warranty period: nash bargaining fairness concern

This study incorporates fairness concern in a low-carbon supply chain coordination mechanism where a single manufacturer sells its product to consumers through a single retailer. We develop four different scenarios of the Stackelberg master-slave game utility model—both members are neutral (NN), the manufacturer (FN) or retailer (NF) has fairness concern, and both are not neutral (FF), where the Nash bargaining fairness reference is leveraged to capture the impact of fairness preference on low-carbon supply chain optimisation decision-making profits, level of carbon emission reduction, warranty period, and revenue-sharing. Finally, numerical studies are conducted to quantify the impact of the Nash bargaining fairness concern. Research shows that: (1) fairness concern made it worse for the retailer but beneficial for the manufacturer and the system. (2) fairness concern causes a reduction in the level of carbon emission reduction and warranty period. However, the reduction of carbon emission reduction trading price and a certain range of revenue sharing effectively reduces the impact of fairness concern on members. (3) The revenue-sharing contract effectively reduces the negative impacts of fairness concern on supply chain members. The paper is a guide for enterprises development and cooperation but also provides empirical evidence for the government.

Recycling channel design and coordination in a reverse supply chain with customer green preference

This study investigates the selection of recycling mode and the coordination mechanism in a reverse supply chain (RSC) that consists of one remanufacturer, one traditional recycler, and one smart recycler. We characterize the collection cost differences between traditional recycling and smart recycling, and the scrap rate of used products by smart recycling. We consider three recycling modes with recycling pricing competition, conditional on whether the remanufacturer collaborates with the traditional recycler, with the smart recycler, or with both recyclers. We show that the optimal recycling channel strategy for the remanufacturer is to enroll both the traditional recycler and the smart recycler, and the competition between these two recyclers exerts some non-trial implications on the firms’ equilibrium pricing strategy and profitability. By comparing the equilibrium outcomes with a centralized system, we further develop two coordination contracts: a two-part tariff contract and a transfer price combined with a profit-sharing contract, both of which can effectively mitigate double marginalization and improve the supply chain’s overall performance. Our findings provide useful guidance for the design of recycling channels, and for the coordination of RSC members to achieve Pareto improvement.

Supply chain coordination mechanisms of coal power enterprises under renewable energy quota system: A perspective of game analysis

The renewable energy quota system has become an important policy tool for countries around the world to solve the differences in renewable energy resource endowments between regions and promote the transformation of energy structure. How to coordinate the supply chain of power generation enterprises from the micro level of enterprises has become a key issue to ensure the implementation of renewable energy quota system. By constructing a game analysis model, this research studied the coordination game problem between the supply chain of coal power enterprises and renewable energy enterprises, and compared and analyzed the differences in decision-making between centralized and decentralized situations. The results illustrate that in the case of centralized decision-making, although renewable energy enterprises and coal power enterprises can guarantee profits and carbon emission reduction effects. However, in the real situation of independent rational economic man, it is difficult to ensure the real realization of centralized decision-making. Further, the research proposed that in the case of decentralized decision-making, the negotiation mechanisms of revenue sharing, cost allocation, and revenue sharing + cost allocation were used to solve the supply chain coordination problem of renewable energy enterprises and coal power enterprises. The equilibrium solution of the game model under different negotiation mechanisms is obtained. Finally, the results of theoretical analysis were verified by practical examples and the corresponding sensitivity analysis is carried out. The conclusion has decision-making reference value for solving the coordination problem between coal power enterprises and renewable energy enterprises, improving the overall income of supply chain and carbon emission reduction, and effectively promoting the implementation of renewable energy quota system.

Optimal decisions and coordination mechanism in a green supply chain with loss‐averse consumers in environmental quality

AbstractWe consider consumers' loss aversion in environmental quality and develop a two‐period game theoretical model to investigate the optimal pricing and environmental quality decisions for a green supply chain where a manufacturer sells products to consumers through a retailer. We then introduce a two‐part tariff contract to coordinate the supply chain for both periods. We suggest that optimal decisions in the second period depend on the reference point of the first period in the decentralized supply chain. A higher reference point leads to the increased environmental quality of products, prices, and profits of supply chain members in the second period. However, when the reference point is sufficiently high, the environmental quality will be lower to avoid excessive environmental investment costs. Furthermore, consumers' loss aversion reduces the environmental quality of products when the reference point is low. As consumers' loss aversion increases, the manufacturer's profit rises, while the wholesale and retail prices and the retailer's profit show a decreasing and then increasing trend. Finally, we find that a two‐part tariff contract enables the two‐period supply chain to be coordinated and achieve Pareto improvements in profit and environmental quality. This study sheds valuable light on understanding consumer environmental preferences and irrational behavior for supply chain decision‐making and green product design.

The Maize Supply Chain Coordination Mechanism under Yield Uncertainty Caused by Drought: A Study in the Heilongjiang Province of China

The Maize Supply Chain Coordination Mechanism under Yield Uncertainty Caused by Drought: A Study in the Heilongjiang Province of China

Profit-Sharing Contract of the Fresh Agricultural Products Supply Chain under Community Group Purchase Mode Considering Freshness Preservation Efforts

This article constructed a four-level fresh agricultural product (FAP) supply chain with a two-stage pricing strategy under a “community group purchase (CGP) platform + direct procurement from the FAP supplier” sales model. We investigate the influence of the CGP agency’s participation in the control strategy of FAP freshness preservation efforts on the profits of supply chain stakeholders. This article discusses the effects of the FAP supplier profit-sharing ratio, the CGP agency profit-sharing ratio, and consumers’ sensitivity to FAP freshness on the supply chain stakeholders’ freshness preservation efforts. Moreover, based on the fairness preference theory, this article designed a profit-sharing contract that involves the Nash bargaining game between the FAP supplier and the CGP agency as the supply chain coordination mechanism. Modeling results revealed that: (1) The CGP agency’s freshness preservation efforts increased total supply chain profits. (2) The FAP supplier profit-sharing ratio, CGP agency profit-sharing ratio, and consumers’ sensitivity to FAP freshness have a positive correlation to the profits of the FAP supply chain and promote the coordination of the supply chain. (3) Considering fairness preferences, with the increase in FAP suppliers’ business negotiating ability, their freshness preservation efforts and fairness utility both increased gradually, while the fairness utility of the CGP agency gradually decreased.

Coordination mechanism of the three-echelon supply chain of fresh agriproduct with joint efforts

Nowadays, the freshness level of agriproducts has become one of the major concerns for consumers. The demand for fresh agriproducts in the market has been increasing more than ever. However, the circulation losses of fresh agriproducts is significant during logistic processes, such as long-distance transportation. Statistics show that 20–25% of perishable agriproducts deteriorate in the circulation loop in developing countries, whereas in developed countries, this can be controlled at <5%. Developing countries must improve their cold-chain logistics and reduce post-production losses of this kind of agriproduct. The freshness-keeping effort for fresh agriproducts and the coordination mechanism of the supply chain have become two of the hot topics in this field. Based on the existing research, this study describes the freshness-keeping effort as a joint effort function of the supplier and the manufacturer, and studies the optimization and coordination of a three-echelon fresh agriproduct supply chain. In this research, four decision-making scenarios are modeled and analyzed, including decentralized decision-making, centralized decision-making, and two kinds of collaborative decision-making. Then, the profit distributions of two collaborative decision-making scenarios and centralized decision-making scenarios are calculated using the average tree solution. The study suggests that different cooperation styles of enterprises in the agriproduct supply chain have a different impact on the freshness level of the final product received by consumers. Both the final freshness level and the price of the product depend on the joint freshness-keeping efforts of the supplier and the manufacturer. The cooperation of enterprises in the three-echelon fresh agriproduct supply chain is conducive to the improvement of the final freshness level of agriproducts and the maximization of the supply chain's total profit. In such a three-echelon fresh agriproduct supply chain, the use of average tree solution can effectively distribute the profit and promote cooperation among different parties.

Research on Decision-making and Coordination Mechanism of Low-carbon Supply Chain Led by Retailers under Information Asymmetry

Research on Decision-making and Coordination Mechanism of Low-carbon Supply Chain Led by Retailers under Information Asymmetry

The coordination mechanism of a risk-averse green supply chain

PurposeThis study aims to establish a centralized decision-making game model and manufacturer-led Stackelberg game model based on factors of risk aversion of supply chain members and product greenness. The research aims to study whether the introduction of the “cost + risk sharing” contract affects coordination of this type of green supply by calculating the optimal decision of each mode.Design/methodology/approachThis research designs a supply chain model under centralized and decentralized decision-making. This model uses the Stackelberg game to calculate the optimal decision under decentralized decision-making to evaluate the effect of a green supply chain and then analyze the “cost + risk sharing” contract and the degree of coordination of the supply chain. A sensitivity analysis is conducted on the centralized mode for the impact of variables on the supply chain.FindingsThis research finds a double marginalization effect in decentralized decision-making, and the risk aversion coefficient plays a decisive role in the utility of supply chain members. The specific range of risk- and cost-sharing factors allows supply chain members to achieve Pareto improvements and provides decision-making based on the corresponding management strategies according to each other’s risk preference degree.Research limitations/implicationsThe influence of each variable on the green supply chain in the centralized mode is studied by MATLAB numerical simulation. It provides reference for green supply chain members to formulate corresponding management strategies according to each other's risk preference degree.Originality/valueThis research innovatively considers manufacturers and retailers to explore the market demand for product greenness. It introduces a novel “cost + risk sharing” contract to coordinate the green supply chain.

Coordination mechanism of logistic service supply chain: a perspective of presale sinking and risk aversion

Coordination mechanism of logistic service supply chain: a perspective of presale sinking and risk aversion

Coordination Mechanism of Logistic Service Supply Chain: A Perspective of Presale Sinking and Risk Aversion

Coordination Mechanism of Logistic Service Supply Chain: A Perspective of Presale Sinking and Risk Aversion

Coordination mechanisms of closed-loop supply chain under cap-and-trade policy

Coordination mechanisms of closed-loop supply chain under cap-and-trade policy

A novel buy-back contract coordination mechanism for a manufacturer-retailer circular supply chain regenerating expired products

The expiration of many deteriorative products imposes high costs on the supply chain. A new strategy is proposed in this paper that integrates technological capabilities and supply chain management initiatives to overcome this challenge. The technological capabilities equip the supply chain with a regenerative process to reuse the expired products in other products. On the other hand, to facilitate and optimize the application of the technology, the integration and coordination techniques of the supply chain are employed. This innovation is in accordance with the zero-waste concept arising in the circular economy era and circular supply chain. The paper focuses on integrating a supply chain consisting of one retailer and one manufacturer and developing a new buy-back coordination mechanism to provide enough incentives for the cooperation of members and encourage them to participate in the regenerating operations. It is proved that the proposed strategy is economically feasible if and only if the revenue of each unit of reused product in addition to the saving on its disposing cost, is greater than its reprocessing cost. Furthermore, it is shown that an integrated supply chain equipped with the mentioned technology earns more than one that only benefits the integrated decisions of the whole supply chain. The efficacy and intricacy of the developed model are validated in a dairy supply chain that revalues expired products by turning them into a type of fertilizer. Moreover, a thorough sensitivity analysis of the paper indicates that the mean and standard deviation of demand positively encourage the cooperation strategy while the replenishment cycle time has adverse effects on the profitability of members.

Pricing strategy and coordination mechanism of dual-channel supply chain based on reference quality effect

The difference between the actual product quality experienced by consumers after shopping and the product reference quality expected before shopping usually has a significant effect on product demand and brand reputation. This paper considers a dual-channel supply chain composed of a manufacturer and a retailer. This investigation is on the influence of consumers’ reference quality under centralized decision-making, decentralized decision-making Bertrand game, and decentralized decision-making Stackelberg game. Furthermore, in view of the influence of reference quality, this paper constructs cost-sharing contracts and two-part tariff contracts to discuss the consistency of the dual-channel supply chain. The results show that consumers’ reference quality effect has a positive impact on the equilibrium price and profit of the dual-channel supply chain. Under normal circumstances, the dual-channel supply chain cannot achieve conformity. However, consistency can be achieved under the two-part tariff contract mechanism. Finally, numerical simulation is carried out for verification with numerical values.

Analysing supply chain coordination mechanisms dealing with repurposing challenges during Covid-19 pandemic in an emerging economy: a multi-layer decision making approach

Following the outbreak of the Covid-19 pandemic, there was a serious need for the pharmaceutical industry to combat the disease more quickly and effectively. In this regard, numerous companies set out to repurpose current drugs. The noticed decision has major challenges in various dimensions, including the creation and management of an efficient supply chain. The present study attempts to examine the significance and relationships of the repurposing challenges and analyze the effectiveness of supply chain coordination contracts confronting them. In this regard, a combination of Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytic Network Process (ANP) named DANP method is applied to investigate the relationships and extracting the weights of the mentioned challenges and the multi-criteria optimization and compromise solution technique called VIKOR is employed to prioritize the supply chain coordination contracts found on their impact facing with repurposing challenges. The mentioned techniques have been conducted under the condition of linguistic Z-numbers. The results demonstrated that financial support and digitalization are the most influential challenges. Moreover, collaboration and data availability have the most weight. In addition, four contracts including effort sharing, cost-sharing, credit option and buyback are the best contracts that companies in the merging economy of Iran should concentrate on them. This research proposes a novel framework of decision-making by integrating DANP and VIKOR with linguistic Z-numbers. Additionally, this study takes a new look at the use of coordination contracts from the viewpoint of repurposing challenges which is highlighted particularly during the Covid-19 pandemic.

Research on electricity supply chain strategy coordination considering peak-valley pricing policy and service quality investment

An electricity supply chain game model composed of electricity generation enterprise and electricity retailer enterprise is constructed to evaluate the impact of service quality and peak-valley pricing on electricity supply chain coordination mechanism. Decisions on electricity service quality and peak-valley pricing are studied. Following this, the contract coordination under the electricity supply chain is discussed. Based on the game framework, the main research results are as follows. First, the centralized system provides a lower peak-valley price and higher electricity service quality, electricity demand, and supply chain’s profit compared with the decentralized system. Second, with the service quality sensitivity coefficient, the electricity service quality, electricity price, and electricity demand increase, increasing the profit. Third, with the electricity service quality cost coefficient, the electricity service quality, electricity price, and electricity demand decrease, reducing the profit. Fourth, revenue sharing and an electricity service quality investment cost-sharing contract could achieve the coordination of the supply chain.

Design of risk sharing and coordination mechanism in supply chain under demand and supply uncertainty

Perishable and short-life products can be seen everywhere in life. Due to the particularity of these products, they are more complicated in supply chain management. This paper studies whether the two-part tariff and ZRS contract can achieve the purpose of reducing risks and coordinating supply chain. We assume that market demand and supplier yield are uncertain, and we use game theory and probability distribution for research. The research results show that when the information is asymmetric, the manufacturer always ignore the demand forecast information provided by the retailer under the wholesale price contract. When the demand is uncertain, regardless of whether the information is symmetric or asymmetric, the two-part tariff contract and the ZRS contract can coordinate the supply chain and achieve maximum profit. When the retailer’s degree of risk aversion is high, the ZRS contract is better than the two-part tariff, which can reduce the risk of retailers and achieve the purpose of coordinating the supply chain. When the supply is uncertain, the manufacturer can provide the supplier with a risk-sharing contract, including the return price and the sharing ratio that meet certain constraints. Such a contract can effectively reduce the supplier’s risk and realize supply chain coordination.

Optimal strategies of green product supply chains based on behaviour-based pricing

Behaviour-based pricing (BBP) fully considers the willingness to pay, behavioural characteristics and rational expectations of new and old customers and can dynamically adjust pricing strategies based on purchase histories. Therefore, compared with uniform pricing, BBP can promote the development of green products in the market. Additionally, BBP gradually influences the pricing decisions of the supply chain. Therefore, this paper explores for the first time the pricing decisions and coordination mechanisms of the green product supply chain (GPSC) under a behavioural pricing model. BBP is implemented under two scenarios, centralisation and decentralisation, and the optimal pricing and supply chain decision-making are compared. Under the centralised scenario, the profit, greenness, market share and environmental friendliness are all higher than those under the decentralised scenario, and in most cases, consumers can better afford green products. Therefore, a revenue-sharing model is designed to realise GPSC coordination under BBP. The numerical experiments show that the proportion of revenue shared by green product retailers is positively correlated with the initial market share of green products; the proposed coordination mechanism can improve the greenness and profits of enterprises in a GPSC, the consumer surplus of green products and the overall environment performance.