Part Of Supply Chain Research Articles

Evolutionary Game Analysis Among Three Green-Sensitive Parties in Green Supply Chains

A green supply chain, as one of the most critical low-carbon strategies, has been widely studied along with evolutionary game theory, for which governmental policies, such as a carbon tax, subsidies, or penalties, have been frequently applied; however, green sensitivity has been little explored. In this study, a general evolutionary game model composed of green-sensitive governments, enterprises, and consumers is built by considering the policy factors, and the evolutionary stable strategies of this model are solved. The solution results reveal that the green sensitivities significantly affect the evolutionary dynamics and stable strategies of the model. Green supply chains can evolve from low to advanced stages as the green sensitivities increase. At low development stages, governments must take the lead in enhancing their green sensitivity, resort to two key composite policy factor solutions, and encourage enterprises and consumers to increase their green sensitivities and drive them to adopt green strategies. As the green sensitivities of both enterprises and consumers have progressively increased to a certain high level, governments can adopt a nonsupervision strategy, reaching an advanced evolutionary stable strategy with the enterprises and consumers having complete autonomy. Therefore, green sensitivity has been proven to be a substitute for policy factors for green supply chain development. Moreover, the advanced strategy cannot be reached by any policy factor composition without green sensitivity. The findings above clarify the significance of green sensitivity, indicating that specific government policies based on the specific green sensitivities of the three parties can improve green supply chain management.

Reselling or Agency Selling? Consumer Valuation, Quality Design, and Manufacturers' Competition

The retail e-commerce yields lucrative revenue in many industries. In this work, we provide a strategic perspective by investigating how consumer valuation, product quality, and manufacturers’ competition influence the choice of selling agreement using stylized models. The utility and valuations of consumers are involved in analyzing strategic decisions under different selling agreement that is not trivial to analyze. We first show that agency selling agreement induces a higher retail price, but this can benefit the entire channel; under this agreement, the agency fee and consumer valuation present a nonmonotonic (approximately U-shaped) relation. Even though double marginalization exists, reselling agreement induces the manufacturer to make low-quality product compared to the agency selling agreement, but such a low-quality product is only profitable for the manufacturer. Second, when introducing manufacturers' competition, agency selling agreement can induce a wider quality difference: higher high-quality and lower low-quality. Agency selling agreement also hurts the manufacturer and the entire channel, but this is a preferred format for the low-quality manufacturer. Both the high-quality manufacturer and the entire channel and are profitable to choose the reselling agreement; offering a high-quality product can hurt the manufacturer remains robust. Third, the first-mover manufacturer can get a lower profit than the follower retailer. Moreover, when comparing scenarios with alternative sequences of making decisions, first-mover can lead to disadvantage, in that both supply chain parties prefer to act later rather than earlier. Our work also explains the rationale about why e-commerce firms in China now pay more attention to low-end consumers.

The role of relationship quality and loyalty between rice farmers and food companies in supply chain

Relationship quality plays a key role in maintaining the connection among parties in a supply chain. Relationship quality promotes loyalty of the supply chain’s factors. This study applies structural equation modeling (SEM) to point out factors affecting the relationship quality and loyalty between farmers and food companies in the rice supply chain. The research data were collected by stratified sampling with a sample size of 232 farmers associating with food companies in the rice supply chain in the Mekong Delta. The four impacting factors that the study has found out include trust, perceived benefit, support policy, and payment terms. Most importantly, the study has demonstrated that relationship quality has a positive correlation with loyalty among parties in the regional rice supply chain.

Measuring the Impact of E-Collaboration on Supply Chain Parties: A Value-Based Management Approach

Information sharing in E-Collaboration is increasingly prevalent. This study measures the shareholder value created by E-Collaboration along a supply chain. Three system dynamics (SD) models are developed to investigate the impact of three different information sharing strategies, namely, non-information sharing, partial information sharing, and full information sharing. The impact on different supply chain parties is quantified from the value-based management perspective and economic value added (EVA) is adopted as the value-based performance metric. A numerical example of an E-Commerce retailer-distributor-manufacturer supply chain is presented and followed by profound implications. The analysis demonstrates how value is amplified by E-Collaboration and the unified metric reveals added value’s highly imbalanced distribution among different parties. The EVA boost reaped by the manufacturer is about 1000 times more than the retailer’s gain under full information sharing. The study provides an original contribution to this stream of research by proposing a uniformed supply chain performance metric, revealing counter-intuitive implications and guiding strategic E-collaboration.

Sustainable Electrical Energy Supply Chain System With Hybrid Power Generation: An Inventory Approach

In this paper, we present a sustainable electrical energy supply chain system (SEESCS) where two supply chain parties are involved, namely a power plant and a transmission station. The power plant has two different types of power generation systems. The first power generation system (PG1) is more costly but it generates lower emissions than the second system (PG2). The model is developed based on a lot-sizing inventory problem to decide the load allocation between PG1 and PG2. The objective function is to minimize total costs that consist of energy generation cost and emission cost. The transmission station faces a stochastic demand and employs a continuous review policy to manage the electrical energy storage. An efficient procedure is developed to solve the model and a sensitivity analysis is carried out to explore the impact of changes in some key parameters on the model's behavior. The results show that the allocation of electricity generation is mostly influenced by the change in PG1's production cost parameter and PG2's emissions parameters. The amount of emissions generated from the system is significantly affected by the variation in PG1's production cost parameter, PG2's emissions parameters, and electricity demand. Furthermore, by adjusting the power supply rate of power generation, the supply chain can control the overall emissions produced and maintain the total cost.

Manufacturer encroachment in a product market and common ownership between supply chain parties

This study examines the effect of common ownership on supply chain management. From our model analysis, the following results were obtained. First, under specific economic environments, manufacturer encroachment improves retailer payoff. Second, under specific economic environments, consumer surplus and total surplus are decreased by manufacturer encroachment. Generally, when many channels exist, desirable results are achieved for consumers because they can purchase products from their preferred channels. However, our results demonstrate that common ownership engenders better results in cases with fewer channels than in cases with more channels. Therefore, our results suggest that consumers should not simply enjoy many channels: they should also devote attention to the behavior of supply chain parties who have a common owner. Additionally, we demonstrate that increasing the share of ownership by the manufacturer improves the total surplus under a non-encroachment case.

Computer simulation and optimisation of material handling systems

All parties in today's supply chain have to face a tremendous pressure that results from the competitive market factors such as short product life cycle, stringent regulations and keen competition. For manufacturers and distributors, these factors are considered as driving forces for improving the effectiveness and efficiency of their manufacturing and distribution systems. In this respect, computer-based discrete-event modelling and simulation methodologies have emerged as a very useful tool to facilitate the effective analysis of these complex and uncertain operations. However, computer simulation alone may not guarantee optimal solutions in most situations. In this regard, this paper presents an optimisation framework that couples the process of optimisation and simulation such that the strengths of both techniques are leveraged. The proposed simulation-based optimisation framework integrates an immune-inspired algorithm with a simulation tool for determining optimal parameters of material handling systems. The performance of the framework is evaluated via two case studies. [Submitted 22 October 2016; Accepted 26 August 2019]

EXPLORING FACTORS AFFECTING SUPPLY CHAIN RELATIONSHIPS CONSTRUCTION

Managing business relationships between the parties in construction supply chains (CSCs) is the essential element of construction supply chain management (CSCM). Therefore, in order to have success in the CSCM, the relationships between the parties should be noticed. This study aims to identify and discover important factors affecting supply chain relationships in construction. The study identified 12 key factors affecting the supply chain relationships in construction and ranked them according to their degrees of impact. The findings showed that “working relationship”, “top management support”, “trust”, “business attitude”, and “communication” are the five most influential factors. The study can be considered as valuable additional contribution to the body of knowledge relating to the CSCM. The findings could help practitioners to have an insight into the CSCM and obtain success in managing the CSCs.

Third-party logistics in construction: perspectives from suppliers and transport service providers

Suppliers and transport service providers are key parties in the construction supply chain, and their respective roles when employing a construction logistics setup based on third-party logistics are investigated. The use of construction logistics setups is an ongoing trend for large and complex construction projects and previous research has mainly focussed on the downstream actors. The purpose is to explore how suppliers and transport service providers in the construction supply chain are affected by the use of dedicated and project-specific construction logistics setups outsourced to third-party logistics providers in construction projects. The upstream actors’ attitudes towards and experienced effects from construction logistics setups operated by a third-party logistics provider, as well as their level of supply chain management maturity are studied in an explorative case study of a large construction project. Results show positive attitudes and that suppliers and transport service providers actively address supply chain management issues, whereas actual effects of the construction logistics setup on upstream actors, in this case, are inconclusive. Yet, the analysis indicates that a third-party logistics provider can assume the role of a systems integrator in the construction supply chain, balancing, and possibly, integrating the supply chain with the construction site.

The relationship between supply environment, supply chain integration and operational performance: The role of business process in curbing opportunistic behaviour.

The opportunistic behavior of parties in the supply chain leads to resource wastages. Information asymmetry and the opportunistic behavior of transacting parties in supply chains squanders the intended benefits of supply chain integration (SCI). Literature suggests that reducing information asymmetry between transacting organizations will curb their opportunistic behavior. This study investigates the SCI between the hauliers and the container depots. The hauliers provide the transportation of containers for the shippers and consignees to and from the depots. Transaction Cost Economics (TCE) underpins the conceptual framework. The supply environment which embodies transaction cost economics attributes is expected to affect SCI and SCI is expected to affect operational efficiency and subsequently environmental performance. Business process is anticipated to moderate the impact of SCI on operational efficiency by reducing information asymmetry and curbing opportunistic behavior. Responses from 84 haulier companies were analyzed using partial least squares, structural equation modeling. Results indicate strong support for almost all transaction cost economics propositions. However, transaction cost economics suggests that transaction attributes have a linear relationship with SCI, though findings from this study indicate that it could be curvilinear. Results confirm that strengthening of business process between hauliers and depots could strengthen the SCI positive impact on hauliers' performance and subsequently their environmental performance. Stronger SCI can reduce cost and increase revenue and at the same time, reduce the greenhouse-gas emissions of the hauliers. Findings support that economic gains and environmental protection can be complementary and can be attained by curbing the opportunistic behavior of organizations in supply chains.

A joint economic lot-size model for sustainable industries of recycled content products

Coupling forward and reverse operations in closed-loop supply chains (CLSCs) can lead to a higher degree of sustainability. Previous studies on CLSCs have focused on the products that are either purely remanufactured or purely new. The emphasis on recycling necessitates research that considers recycled content products, which are made from a mix of virgin and recycled material. We study a CLSC consisting of a manufacturer, a retailer, a supplier, a material recovery facility (MRF) and a recycling facility. The supplier and the recycling facility provide the virgin and recycled raw materials, respectively, to the manufacturer who mixes them based on a predefined proportion known as the recycled content level to produce the finished products for the retailer. The recycling facility recovers the manufacturer’s production waste as well as the used products collected by the MRF. We aim at maximising the chain-wide profit by optimising the shipments among the supply chain parties. We propose a Branch-and-Bound algorithm to obtain the optimal solution, and a heuristic procedure, which provides the optimal solution in 96% of all tested instances. In addition, we prove the optimality of a bang-bang policy for the recycled content level in most cases.

How Do You Manage Online Delivery Package Waste?

Packaging is a critical element in the online product delivery process. Even the best products will not attract customers if they are delivered to end users with damage. Many companies use mixed protective packaging, often, overpackaging, attempting to ensure logistics effectiveness and increase customer satisfaction. This practice does not fully consider resources consumption in producing packaging or environmental damage from excess packaging disposal. Packaging waste is a growing problem for firms that practice mixed protective packaging. Managers need to act to rationalize the type and amount of packaging materials they adopt. Product delivery is a complex decision that involves diverse managerial perspectives and may cause tensions for cross-functional organizational performance. Major supply chain parties including product sellers, online platforms, logistics carriers, and consumers each share concerns, which are unique to their situation. This article proposes an online product delivery scorecard that performs as measurement tool to evaluate product packaging from an integrated perspective of product sellers, online platforms, logistic carriers, and consumers using dynamic metrics. We challenge the traditional assumption of the positive relationship between packaging and customer satisfaction. Excessive packaging may also hurt customer satisfaction. Managerial considerations are also discussed to provide solutions for managing online delivery package waste.

Manufacturer warranty service outsourcing strategies in a dual‐channel supply chain

AbstractWarranty management for durable products has received increasing attention in recent years. In addition to conventionally keeping warranty in‐house, more manufacturers choose to outsource warranty service to agents. This paper explores outsourcing strategies for manufacturer warranty services in a dual‐channel supply chain by which the demand‐enhancing service can be undertaken by different supply chain parties. We show the results of three alternative outsourcing strategies for manufacturers whereby (a) the retailer undertakes the service, (b) a third party undertakes the service, and (c) both the retailer and a third party undertake the service simultaneously. According to Stackelberg game theory, we build a two‐echelon supply chain model and discuss the corresponding expressions for supply chain members' equilibrium decisions. Additionally, we compare the profits of each supply chain member and derive interesting managerial insights. When the base market size is relatively large, Scenario R helps the manufacturer and the retailer reach a “win‐win” situation.

Coordinating contracts as an instrument of supply chain profit maximization under short-term financing necessity

In this paper the problem of the supply chain expected profit maximization under the assumption of the short-term financing necessity for one of the supply chain parties using a coordinating contract is considered. The solution is derived for a two-echelon supply chain under the assumption of product demand being distributed as uniformly. A revenue-sharing contract with bank financing and a modified revenue-sharing contract with trade credit financing are explored. It is stated that none of the studied contracts is coordinating, as they do not provide the supplier’s expected profit maximum. The conditional coordination of supply chain with a modified revenue-sharing contract with trade credit financing is considered if the supply chain and the retailer’s expected profit maximum are reached and the supplier’s expected profit is greater than in case of application of a modified wholesale price contract with trade credit financing and a revenue-sharing contract with bank financing. It is proved that it is beneficial for both supply chain parties and the problem of the supply chain expected profit maximization under the assumption of the short-term financing necessity for one of the supply chain parties can be solved using a modified revenue-sharing contract with trade credit financing.

Uloga i značaj dilera (prodavca) na tržištu automobila u Republici Srbiji

Cars are the most sophisticated mass-produced products and are the result of years of research and development. Due to this nature, the technological development of cars is, in general, unpredictable. Even when they meet expectations, consumer acceptance varies from one market to the next. Consumer markets consist of customers who want to spend or benefit from a purchased product and who do not buy the product for profit, as the main goal, but to meet their needs. The role of dealers in the automotive industry is of increasing importance to both production volume and car models. Without their presence, there is the question of product placement, product pricing, and marketing activities. The strategy of the manufacturer or dealer himself is of the utmost importance, as the company creates value and how it achieves a competitive advantage, while the cost advantage sources depend on the structure of the given industry. Also crucial for the auto industry is the supply chain of spare parts. Price is a strategic and tactical variable that influences sales volume.

GLOBAL CONTAINER SHIPPING OPERATORS’ STRATEGIES AND THEIR IMPACT ON LOGISTICS SUPPLY CHAINS

The world economic and financial crisis that seriously hit the global economy and especially its trade and transport sectors in the years 2008-2009 also affected with significant force the global maritime container transport. This strategic maritime transport subsector is regarded as a driving force of smooth development of the global logistics supply chains and the backbone accelerating globalization processes. However, since 2010 effective demand and potential supply on the global container freight market are in constant state of disequilibrium, caused to a large extend by wrong tonnage investment strategies of container operators. Lack of ability to adapt the supply side to changes occurring on the demand side of the container market has brought numerous serious financial and economic consequences which not only affected the global container shipping operators but also hit other parties involved in the logistics supply chains spread within the global logistics space created in the contemporary global economy. Purpose: The main objective of this paper is to evaluate the dynamics of global maritime container market, especially its demand side which fluctuates vigorously, and assess the short and medium term strategies applied by the powerful shipping operators in terms of their multi-channel impact on the other parties of the global intermodal supply chain and the global logistics system as a whole. Methodology: The traditional method of maritime freight analysis was applied based on container freight and charter indices, such as SCFI or HFI. They reflect the amplitude of freight rate per TEU fluctuations in a certain period of time (e.g. quarter, week, etc.) which is congruent with the effective demand changes confronted with the existing potential supply. Growth of tonnage capacity, determined by the global container shipping operators’ strategies aimed for further development and better utilization of the existing transport potential of container fleet acting on the very competitive global freight market, has been assessed in terms of logistics efficiency and its effects have been estimated within the global value chain. Findings: The obtained results indicate that: 1/ global maritime container transport market is still significantly unbalanced and subject to high dynamics of demand fluctuations, and consequently freight rates , 2/ applied strategies of maritime global container operators in the operational and investment area fail to bring intended results, leading to strong capital horizontal integration in the sector of maritime container transport and vertical integration within the global logistic supply chains, 3/ the situation destabilizes the operations of global supply chains and consequently the global TSL sector, preventing forwarders and shippers from taking rational decisions on a medium and short term basis, 4/ this relatively long-standing situation (from 2010) shakes the foundations of transport and logistics order worldwide, 5/ the beneficiary of this situation on the market of maritime container transport and strategic decisions of global container operators is global economy as well as consumers of goods imported by sea in containers. Originality/value: The approach proposed by the author regarding the analysis of the effectiveness of freight market operations in the context of developed and implemented operational and investment strategies of maritime container operators with an attempt to assess the effects of such decisions within global logistic supply chains has not been the subject of research until now. The obtained initial results which require further detailed analysis, provide significant values, both theoretical (enrich the market theory) and practical (as regards taking rational decisions and effective management of global supply chain).

Demand signal transmission in a certified refurbishing supply chain: rules and incentive analysis

Retailers, who sell certified refurbished products, usually have accumulated big data on demand properties, and hence, hold demand signal advantages over the other supply chain parties. In practice, we observe that this signal might be voluntarily shared to a rival who sells regular products. We are therefore interested in the incentives of demand signal transmission of the retailer selling certified refurbished products, and the value of an accurate signal for the other supply chain parties, especially in a one-to-two supply chain comprising a manufacturer (producing both regular and certified refurbished products) and two retailers (selling regular and certified refurbished products, respectively). We formulate the two retailers’ competition and demand signal properties, and find that it is of the best interest for the manufacturer to produce two products, regardless of the possible downstream competition. We derive interesting demand signal transmission rules that the retailer selling certified refurbished products would voluntarily transmit the signal to the retailer (the rival) selling regular products, while it will not transmit the signal to the upstream manufacturer (the business partner). Even if the retailer selling regular products obtains the signal, it will not transmit the signal to the manufacturer either. We discuss the resulting insights regarding the production cost reduction, the government subsidy, and the product quality improvement. We find that the signal transmission rule is robust, and the retailers’ profits may be reduced by the quality improvement of the certified refurbished product.

Contract coordination optimization of a multi-power supplier-single dominant grid supply chain in hybrid electricity market

Purpose In the hybrid electricity market, renewable energy power generator faces the uncertainty of power market demand and the randomness of the renewable energy generation output. In order to improve the grid-connected quantity of green power, the purpose of this paper is to design the pricing mechanism for renewable energy power generator with revenue-sharing contract in a two-stage “multi-single” electricity supply chain which contains a single dominant power retailer and two kinds of power suppliers providing different power energy species. Design/methodology/approach Considering the dual uncertainties of renewable energy power output and power market demand, the authors design the full-cooperative contract decision-making model, wholesale price contract decision-making model and revenue-sharing contract decision-making model to compare and optimize grid-connected pricing in order to maximize profit of different parties in power supply chain. Then, this paper performs a numerical simulation, discusses the existence of the equilibrium analytical solutions to satisfy the supply chain coordination conditions and analyzes the optimal contract parameters’ variation characteristics and their interaction relationship. Findings The authors find that the expected profits of the parties in the hybrid power supply chain are concave about their decision variables in each decision-making mode. The revenue-sharing contract can realize the Pareto improvement for all parties’ interest of the supply chain, and promote the grid-connected quantity of green power effectively. The grid-connected price will reduce with the increase of revenue-sharing ratio, and this impact will be greater on the renewable energy power. The greater the competition intensity in power supply side, the smaller the revenue-sharing ratio from power purchaser. And for the same rangeability of competition intensity, the revenue-sharing ratio reduction of thermal power is less than that of the green power. The more the government subsidizing green power supplier, the smaller the retailer sharing revenue to it. Practical implications Facing with the dual uncertainties of green power output and market demand and the competition of thermal power in hybrid electricity market, this study can provide a path to solve the problem of renewable energy power grid-connecting. The results can help green power become competitive in hybrid power market under loose regulations. And this paper suggests that the government subsidy policy should be more tactical in order to implement a revenue-sharing contract of the power supply chain. Originality/value This paper studies the renewable energy electricity grid-connected pricing under the uncertainty of power supply and market demand, and compares different contract decision-making strategies in order to achieve the power supply chain coordination. The paper also analyzes the competition between thermal power and renewable energy power in hybrid electricity market.

Supplier Competition and Cost Reduction with Endogenous Information Asymmetry

Problem definition: We consider a buyer sourcing from multiple competing suppliers who exert cost-reduction efforts before procurement contracts are awarded. Academic/practical relevance: The supply chain is subject to the classic hold-up problem—as the lack of a contract commitment hinders suppliers’ incentives to make investment upfront—complicated with supplier competition. Methodology: With deterministic cost-reduction outcomes, suppliers will not exert any effort if this effort is observable, and a pure-strategy equilibrium does not exist if the effort is unobservable. We analyze the mixed-strategy equilibrium with unobservable supplier effort, in which suppliers randomize their efforts and the buyer designs an optimal procurement mechanism. Results: We show that the optimal procurement mechanism can be implemented by a conventional single-price reverse auction with a random reserve price. The mixed strategy of supplier effort generates endogenous information asymmetry on supplier costs that provides suppliers with information rent, which sustains their efforts. The endogenous information asymmetry improves effort efficiency (by inducing positive supplier effort), yet introduces trade inefficiency (by causing the possible failure of trade between the parties). Although increasing supplier competition (measured by the number of suppliers) hurts the effort efficiency, it improves trade efficiency. As a result, the buyer is always better off introducing supplier competition by including more than one supplier in the supply base. However, the desired supply base size (number of suppliers) depends on the product revenue: For high-margin goods, the optimal size is achieved with two suppliers, whereas for low-margin goods, a larger supply base is better for the buyer. We show that the result based on deterministic cost reduction can be established as a limit of the case when uncertainty in cost reduction exists and shrinks to null. Managerial implications: Our study helps to understand the impact of supplier competition when supply-chain parties deliberately make their actions unpredictable to avoid being held up. The findings provide managerial guidance on procurement auction and supply base designs.

Unilateral Trade Measures Against Illegal, Unreported and Unregulated Fishing: Unlocking a Paradigm Change in Trade-Environmental Partnerships?

The decades-long yet steady transition of the World Trade Organization (WTO) from value judgment towards procedural empowerment delivers a new impetus to consolidated trade-environmental partnerships in a collective campaign against illegal, unreported and unregulated (IUU) fishing. Although there is an ideal preference for multilateral approaches to address the widespread phenomena of IUU fishing and associated human rights injustice, this article probes an increasingly proactive role of unilateral trade measures to close the supply chain loopholes for IUU-caught fish to enter commerce. Unilateral and trade-restrictive modalities against IUU fishing are embodied by the 2008 European Union IUU Regulation and the 2016 United States Seafood Import Monitoring Program. Innovative trade paradigms should avoid compromising the consensus-building momentum under multilateral governance frameworks in the longer term. Better regulated and coordinated unilateral measures can become a useful pathfinder to globalized strategies. To this end, the WTO needs to work more closely and effectively with the Food and Agriculture Organization and regional fisheries management organizations to ensure that unilateral responses are transparent, well-reasoned and emerge from a rational process of communication and argumentation among supply chain parties.