Multi-retailer Supply Chain Research Articles

Coordination of a single-manufacturer multi-retailer supply chain with price and green sensitive demand under stochastic lead time

When dealing with uncertainties in the supply chain and ensuring customer satisfaction, efficient management of lead time plays a significant role. Likewise, besides managing inventory and pricing strategies adeptly in multi-retailer supply chains, it has become inevitable for firms to embrace green and sustainable business practices. In this context, this paper considers a two-level supply chain consisting of a single manufacturer and multiple retailers in which the manufacturer produces a single product and delivers it to the retailers in equal-sized batches. Each retailer faces a price and green-sensitive market demand. The lead time is assumed to be a random variable that follows a normal distribution. Shortages for retailer inventory are allowed to occur and are completely backlogged. The centralized model and a decentralized model based on the leader-follower Stackelberg gaming approach are developed. A price discount mechanism between the manufacturer and retailers is proposed. For the acceptance of this contract, the upper and lower limits of the price discount rate are established. Numerical outcomes exhibit that the price discount mechanism effectively coordinates the supply chain and enhances both environmental and economical performances. A sensitivity analysis with respect to some key parameters is performed, and certain managerial insights are emphasized.

Coordination of a single-supplier multi-retailer supply chain via joint ordering policy considering incentives for retailers and utilizing economies of scale

Coordination of a single-supplier multi-retailer supply chain via joint ordering policy considering incentives for retailers and utilizing economies of scale

Model Penentuan Jumlah Produksi yang Optimal pada Rantai Pasok dengan Produsen Tunggal dan Multi-Retailer

Determining the optimal size of procurement or production is the key word in determining optimal inventory. An integrated procurement and production size optimization model becomes a model that provides optimal results for all parties involved in the supply chain. This study proposes the development of a single producer and multi retailer supply chain model with the aim of minimizing the total inventory cost (TIC). The company distributes products to each retailer for further sale to consumers by the retailer. The annual demand from retailers is assumed to be different. Model development is carried out to obtain optimal production quantities for producers, optimal delivery quantities and determine the optimal number of retailers. The determination is based on the manufacturer's production cycle time is the same as the inventory cycle time at each retailer is the same. A simple algorithm is used to determine the optimal cycle time which can be followed by determining the optimal production size, optimal number of shipments and optimal number of retailers. At the end of this study, a numerical example of the use of a model that has been built based on case study data of a fertilizer industry is presented as a producer and its partners as retailers. The results of the numerical examples that have been carried out show that the optimal number of retailers is 3 retailers with an optimal production of 742 units, the determination of the optimal number of retailers is obtained from experiments with the lowest TIC value.

Single-Manufacturer Multi-Retailer Supply Chain Models with Discrete Stochastic Demand

Although there are highly discrete stochastic demands in practical supply chain problems, they are seldom considered in the research on supply chain systems, especially the single-manufacturer multi-retailer supply chain systems. There are no significant differences between continuous and discrete demand supply chain models, but the solutions for discrete random demand models are more challenging and difficult. This paper studies a supply chain system of a single manufacturer and multiple retailers with discrete stochastic demands. Each retailer faces a random discrete demand, and the manufacturer utilizes different wholesale prices to influence each retailer’s ordering decision. Both Make-To-Order and Make-To-Stock scenarios are considered. For each scenario, the corresponding Stackelberg game model is constructed respectively. By proving a series of theorems, we transfer the solution of the game model into non-linear integer programming model, which can be easily solved by a dynamic programming method. However, with the increase in the number of retailers and the production capacity of manufacturers, the computational complexity of dynamic programming drastically increases due to the Dimension Barrier. Therefore, the Fast Fourier Transform (FFT) approach is introduced, which significantly reduces the computational complexity of solving the supply chain model.

A mathematical inventory model for a single-vendor multi-retailer supply chain based on the Vendor Management Inventory Policy

A mathematical inventory model for a single-vendor multi-retailer supply chain based on the Vendor Management Inventory Policy

Value and incentives for adoption of Blockchain technology for a single supplier multiple retailer networks

Studies on the adoption of Blockchain technology (BT) in supply chains have recently gained considerable importance because BT can enable secure, scalable, reliable, and traceable information sharing among partners. In this paper, the value of the adoption of BT is analysed in a single supplier and multi-retailer arrangement wherein the demand at retailers could be correlated. The newsvendor model and game theory are used to analyse the expected profit generated by the supplier and retailers from the adoption of BT. The demand pattern (stationary or nonstationary) and structure (number of retailers participating in a private/permissioned BT) affect BT adoption in a single supplier and multi-retailer supply chain coordination. The retailer's incentive increases when more number of retailers with independent demand participates in the BT framework.

Single-manufacturer and multi-retailer supply chain model with pre-payment based partial free transportation

In this paper, a supply chain model between a manufacturing firm and a group of retailers has been developed. Manufacturing firm produces simultaneously both perfect and imperfect items which are separated by screening process. Then the perfect items are transferred to the retailers’ showroom/warehouse located in different places and a part of imperfect items are repaired by rework process. Retailers receive the products from the manufacturer with paying partial pre-payment to ensure the replenishment of order. On the other hand, the manufacturer provides partial free transportation facility to the retailers due to pre-payment. The corresponding problem has been formulated mathematically as a profit maximization problem and then solved it analytically. As an illustration of this supply chain model, three numerical examples have been considered and solved. Finally, post optimality analyses have been carried out to investigate the effects of changes of different parameters on the optimal policy.

An inventory model for single - vendor multi - retailer supply chain under inflationary conditions and trade credit

ABSTRACT This paper presents an inventory model under inflation for deteriorating items in a single-vendor multi-retailer supply chain. The demand is a function of the retail price. The vendor offers the retailers trade credit. Two scenarios; (i) the changes in the inflation rate as a Discrete-Time Markov Chain and (ii) the changes in the inflation rate without considering Markovian conditions are considered. The relationship between the vendor and the retailers is modeled as a Stackelberg – game (the vendor is the leader and retailers are the followers). The retail price, the number of replenishment cycle, the production rate of vendor and the replenishment frequency of the raw material are obtained by maximizing the present value of the total profit for the vendor and the retailers. The results reveal that in the scenario (i), the present value of the total profits for the vendor and the retailers is greater compared to scenario (ii).

A geometric programming approach for a vendor managed inventory of a multiretailer multi-item EPQ model

Due to the uncertain situations of the world, considering inventory management in a stochastic environment gains a lot of interest. In this paper, we propose a multi-item economic production quantity (EPQ) model with a shortage for a single-vendor, multi-retailer supply chain under vendor managed inventory (VMI) policy in a stochastic environment. Three stochastic constraints are developed in the model. Geometric programming (GP) approach is employed to find the optimal solution of the nonlinear stochastic programming problem to minimize the mean-variance of the total inventory cost of the system. Since the problem is in the Signomial form, first, an algorithm is used to convert the model into the standard GP form. The performance of the addressed model and the solving method are evaluated based on computational experiments and sensitivity analysis. A case study in an Iranian furniture supply chain is conducted to show the applicability of the proposed model and 17.78% improvement in terms of total cost is gained.

Reducing the effects of demand uncertainty in single-newsvendor multi-retailer supply chains

Due to fierce competition in today’s global market, businesses are forced to provide customers with high service levels. Typically, vendors produce or order sufficient quantities at the beginning of a selling season to ensure reasonable service levels for the whole season. However, due to the probabilistic nature of demand, high service levels at the beginning of a selling season does not guarantee appropriate service levels during the course of consuming the item. Thus, revision of service levels during a selling season is important and ignoring such revision may lead to serious consequences for businesses like profit loss due to cancelled orders and reduction of the market share of the company. In this paper, we propose a model for a newsvendor supply chain with single vendor and multiple retailers where the vendor has two-ordering opportunities. At the beginning of a selling season, the retailer orders from a vendor a quantity such that a predetermined service level is achieved. At the second-ordering instant, the retailer learns more about the demand pattern and uses the new available demand data to update the coming demand using Bayesian approach. Based on the updated demand, the retailer evaluates the new service level for the remaining portion of the selling season. If this service level is lower than a specific value, a second batch is ordered. We develop the model for general demand distribution and determine the optimal quantities at the beginning of the selling season and at the second-ordering opportunity.

A multi-retailer supply chain model with backorder and variable production cost

The modern marketing environment involves variability and randomness within the numerous parties of any supply chain network. Thus, formation of a supply chain model including multiple buyers and variable production rate is more acceptable than assuming a single-buyer with constant production rate model. This paper considers a supply chain network, where a single-vendor manufactures products in a batch production process and supplies them to a set of buyers over multiple times. Instead of assuming a fixed production rate, as commonly used in the literature, a variable production rate is introduced by the vendor and the production cost of the vendor is treated as a function of production rate. The continuous review inventory model is applied for multiple buyers to inspect inventory levels and a crashing cost is incurred by all buyers to reduce their lead times. The lead time demand follows a normal distribution. The unsatisfied demands at the buyers end are partially backordered. A model is formulated to minimize the joint expected cost of the vendor-buyers supply chain system. A classical optimization technique is utilized to solve the model. An improved algorithm is developed to obtain the numerical solution of the model. Finally, numerical examples are given to illustrate the model.

Optimal Inventory-allocation Integrated Model for Perishable Items with Stochastic Demand in a Single-vendor Multi-retailer Supply Chain

This study investigates an increasingly widespread supply chain system that involves a vendor cyclically supplying specific perishable item to multiple retailers. In general, the vendor has to earlier and accurately determine inventory quantity to meet aggregate demand, and exactly allocate the inventory among a number of retailers to reduce the adjustment costs. Meanwhile, a vital challenge faced for vendors is to develop an efficient inventory- allocation decision model for given perishable item with stochastic and correlated retailer demands during upcoming selling period. To this end, an effective and practical analytical approach, which extends the newsvendor model to incorporate the considered inventory- allocation decision, is proposed here to simultaneously solve the optimal inventory quantity and allocation policy for maximizing expected vendor profits of perishable items. Especially, the lognormal distribution and Ito process is used here to model the behaviors of individual demand shift. Also, an effective integrated approach is presented to work out the aggre- gate demand during next selling period. Finally, numerical experiments are conducted to demonstrate and validate the proposed model and extract the valuable managerial findings.

Price, production and order decisions in a one-manufacturer multi-retailer supply chain with fuzzy costs: two parameter tuned meta-heuristics

Price, production and order decisions in a one-manufacturer multi-retailer supply chain with fuzzy costs: two parameter tuned meta-heuristics

Price, production and order decisions in a one-manufacturer multi-retailer supply chain with fuzzy costs: two parameter tuned meta-heuristics

This paper develops a mixed integer nonlinear programming model of a one-manufacturer, multi-retailer, multi-period supply chain, where demands of retailers are affected by selling prices and learning curve is considered in production costs. Also, fuzzy concept is applied to cope with uncertainty of cost's parameters. Two meta-heuristic algorithms, namely genetic algorithm (GA) and invasive weed optimisation (IWO) are proposed to solve the model. With optimising parameters of the two meta-heuristics using Taguchi design of experiments, numerical examples showed that the proposed IWO has better performance in comparison with the GA. The IWO, then, is applied to solve the fuzzy model.

Theoretical Analysis on the Pricing and Advertising Coordination of Multi Retailer Supply Chain from the Perspectives of Common Interest Maximization

With the arrival of global economic integration, the enterprise gradually realized the joint and downstream enterprises form a complementary advantage on its importance to enhance the overall competitiveness of the supply chain. To deal with the corresponding challenges, in this paper, we conduct research on pricing and the advertising coordination of multi retailer supply chain from the general perspectives of common interest maximization. For the two stage supply chain consisting of a single manufacturer and single retailer as the background, study retailers to establish online channel and manufacturers to establish the online channel and applicable condition, the difference between two kinds of the channel model and double channel of supply chain coordination mechanism. The core idea of supply chain management is focus on supply chain node enterprise specializing in their core business, and outsources non-core business to other enterprises, so as to achieve supply chain of all enterprises focus on their good at business. Our research optimizes the traditional game theory framework to achieve the better model for the issues. The experimental analysis verifies the feasibility and the effectiveness of our approach compared with the others.

Introducing the Time Value of Money in a Non-consignment Vendor Managed Inventory Model

Vendor managed inventory (VMI) is an integrated approach for buyer–vendor coordination, according to which the vendor (supplier or manufacturer) decides on the appropriate buyer’s (retailer’s) inventory levels. The time value of money has not traditionally been considered in evaluating VMI supply chain’s total inventory cost in any studies up to now. Therefore, in the present study a new model for two-echelon single-manufacturer multi-retailer supply chain under non-consignment VMI program by considering time value of money is proposed. In order to take the time value of money into consideration, the present value of each inventory cost is evaluated in a single period and generalized to infinity horizon and then is transformed to the equivalent annual cost. This model also explicitly includes contractual agreements between the manufacturer and each retailer. Under this type of contracts, an upper bound on each retailer’s inventory level is placed such that the manufacturer is penalized for items exceeding this bound. At the end, a sensitivity analysis is conducted to study effects of key parameters on the optimal solution and validate the proposed model.

Optimizing an inventory model with fuzzy demand, backordering, and discount using a hybrid imperialist competitive algorithm

Vendor-managed inventory (VMI) is one of the popular policies in retailer-supplier partnerships to reduce total inventory costs in supply chain management (SCM). As there is a lack of studies on simultaneous consideration of backordering and discount in the VMI literature, this paper develops a constrained VMI model with fuzzy demand for a single-vendor multi-retailer supply chain, in which the centroid defuzzification method defuzzifies trapezoidal fuzzy numbers of the demand. While there are two constraints, namely warehouse space and number of orders, the aim of this paper is to find a near-optimal solution including the order size, the replenishment rate of the retailers, the maximum backorder quantities of retailers' item, and the suitable price of the item to minimize the total inventory cost. As the developed problem is shown to be NP-complete, a hybrid imperialist competitive algorithm (HICA) is used to find a near-optimum solution. As there is no benchmark available in the literature and that HICA is a population-based meta-heuristic, a single-solution-based meta-heuristic is employed to validate the results obtained. The technique for order preference by similarity to ideal solution (TOPSIS) determines the better algorithm in solving the problem in terms of six criteria. Moreover, the effects of some cost parameters on the solution obtained are investigated to provide managerial insights. Finally, conclusion and future research are presented.

Coordinating a multi-retailer decentralized distribution system with random demand based on buyback and compensation contracts

Purpose: The purpose of this paper is to set up the coordinating mechanism for a decentralized distribution system consisting of a manufacturer and multiple independent retailers by means of contracts. It is in the two-stage supply chain system that all retailers sell an identical product made by the manufacturer and determine their order quantities which directly affect the expected profit of the supply chain with random demand. Design/methodology/approach: First comparison of the optimal order quantities in the centralized and decentralized system shows that the supply chain needs coordination. Then the coordination model is given based on buyback cost and compensation benefit. Finally the coordination mechanism is set up in which the manufacturer as the leader uses a buyback policy to incentive these retailers and the retailers pay profit returns to compensate the manufacturer. Findings: The results of a numerical example show that the perfect supply chain coordination and the flexible allocation of the profit can be achieved in the multi-retailer supply chain by the buyback and compensation contracts. Research limitations: The results based on assumptions might not completely hold in practice and the paper only focuses on studying a single product in two-stage supply chain. Practical implications: The coordination mechanism is applicable to a realistic supply chain under a private information setting and the research results is the foundation of further developing the coordination mechanism for a realistic multi-stage supply chain system with more products. Originality/value: This paper focused on studying the coordination mechanism for a decentralized multi-retailer supply chain by the joint application of the buyback and compensation contracts. Furthermore the perfect supply chain coordination and the flexible allocation of the profit are achieved.

The effect of forward integration on a single-vendor–multi-retailer supply chain under retailer competition

This paper studies a single-vendor–multi-retailer supply chain and considers the case where the vendor merges with one of its retailers. After the merger, the vendor supplies products to the market both through a direct (integrated) sales channel and through the remaining retailers. Different types of competition are considered for the retailers, namely volume competition, price competition, and no competition. The operations policies of the vendor and the retailers are considered explicitly in this paper by taking account of inventory carrying, setup and ordering costs that result from production and ordering decisions. We compare the pre-merger situation to the situation after the merger and show under which conditions the merger is beneficial to the vendor, the retailers, the supply chain, and the consumers. The results of our paper indicate that the type of competition is of major importance for the structure of the supply chain after the merger, and that under certain conditions, the merger may benefit all parties involved, i.e. the vendor, the retailers, and the consumers.

Vendor managed inventory models for single-vendor multi-retailer supply chains with quality consideration

Vendor managed inventory models for single-vendor multi-retailer supply chains with quality consideration