Supply Chain Coordination Problem Research Articles

Coordinating a platform supply chain with reference promotion effect and Big Data marketing

In this paper, the differential game model is constructed to study the coordination problem of platform supply chain by introducing the impacts of Big Data marketing and reference promotion effect on consumer conversion rate. Firstly, the optimal strategies and the profits under centralized and decentralized modes are given by applying the optimal control theory, and the comparative analyses are carried out. Subsequently, in order to coordinate the platform supply chain, a combined contract including a two-part tariff scheme and a promotion cost sharing scheme is designed. Finally, the effects of system parameters on equilibrium strategies and coordination contract are analyzed. The results show that the respective decisions of the manufacturer and the e-commerce platform as well as the total profit of the supply chain are higher under centralized mode. Moreover, within the feasible region, the combined contract not only achieves channel coordination but also improves the economic situations of channel members. It can be also observed that the coordination capacity of the proposed contract reduces with an increase in the memory parameter and improves with an increase in parameters such as the effectiveness of the Big Data marketing and the effectiveness of the reference promotion effect.

Optimal strategies for green investment, sharing contract and advertisement effort in a supply chain coordination problem

The global environment is experiencing increasingly rapid pollution due to the presence of harmful products generated by human activities, the emissions from vehicular traffic, and the release of carbon dioxide from industrial sources. To save this beautiful earth as well as human beings, it is necessary to reduce pollution by producing eco-friendly products and reducing reckless carbon emissions from industry. Furthermore, advertising serves as a very efficacious strategy for promoting sustainable green products and encouraging customer engagement. In response to the current circumstances, a supply chain model including a manufacturer, a retailer, and customers is devised, incorporating investments in green practices and advertising. This study examines the relationship between client demand and three key factors: marketing effort, the product's green level, and the selling price. In addition, a sharing contract policy between the manufacturer and the retailer on green investment costs is applied in this model. The main focus of this study is to find the optimal values of advertisement effort, the product's green level, the manufacturer's wholesale price, the retailer's selling price and the sharing percentage of green investment that maximize the profits of the retailer and manufacturer, as well as the integrated supply chain system of the proposed model. In order to demonstrate the practical significance of the concept, a numerical example is solved and then a comparative analysis is conducted. Moreover, sensitivity studies are performed to assess the impact of different model parameters on decision factors and profitability. In conclusion, this study provides management insights and offers some closing observations, along with suggestions for future research directions. The findings indicate that the implementation of a sharing contract policy yields more earnings to the participants in the supply chain compared to a decentralized situation. The centralized strategy in supply chain management (SCM) results in higher joint earnings for the manufacturer and the retailer compared to the decentralized and sharing contract policies.

Green Supply Chain Game: Decision-Making and Coordination Mechanism Design

The rapid development of industrialization has led to the increasing contradiction between human and nature, and green products are favored by more and more consumers. In this paper, a two-level green manufacturing supply chain between a manufacturer that produces green products and a retailer that invests in advertising is investigated. The Stackelberg game is used to study the supply chain decision-making and coordination problems when the demand depends on the greenness of the products and the investment in advertising, and to propose a coordination mechanism for cost-sharing and revenue-sharing. Finally, numerical simulation is used to simulate and analyze the research findings and important parameters. Our results indicate that: (1) When the cost-sharing coefficient and the benefit-sharing coefficient satisfy a certain range of conditions, the supply chain members considering a single coordination mechanism are superior to the supply chain without a coordination mechanism; (2) With the gradual increase in the cost-sharing coefficient of contract, the degree of greenness of the products produced by manufacturers and the level of intensity of the advertisements invested in by retailers show a tendency to increase first and then decrease; (3) In the study of the integrated coordination mechanism of cost-sharing and benefit sharing, the stronger the coordination ability of supply chain members, the wider the range of constraints to reach a win–win cooperation, and the higher the benefits created for supply chain members. All this yields novel insights into managing the manufacture of green products in the context of green supply chain members’ consideration of coordination mechanisms.

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.

Maximizing the Benefits of an On-Demand Workforce: Fill Rate-Based Allocation and Coordination Mechanisms

Problem definition: With the rapid growth of the gig economy, on-demand staffing platforms have emerged to help companies manage their temporary workforce. This emerging business-to-business context motivates us to study a new form of supply chain coordination problem. We consider a staffing platform managing an on-demand workforce to serve multiple firms facing stochastic labor demand. Before demand realization, each individual firm can hire permanent employees, whereas the platform determines a compensation rate for potential on-demand workers. After knowing the realized demand, firms in need can request on-demand workers from the platform, and then, the platform operator allocates the available on-demand workforce among the firms. We explore how to maximize and distribute the benefits of an on-demand workforce through coordinating self-interested parties in the staffing system. Methodology/results: We combine game theory and online optimization techniques to address the challenges in incentivizing and coordinating the online workforce. We propose a novel and easily implementable fill rate-based allocation and coordination mechanism that enables the on-demand workforce to be shared optimally when individual firms and the platform operator make decisions in their own interest. We also show that the proposed mechanism can be adapted to the cases when contract terms need to be identical to all firms and when actual demand is unverifiable. Managerial implications: The proposed contract mechanism is in line with the performance-based contracting commonly used in on-demand staffing services. Our results suggest that under an appropriately designed performance-based mechanism, individual firms and the platform operator can share the maximum benefits of on-demand staffing. Funding: This work was supported by the National Natural Science Foundation of China [Grant 71871097] and the Fundamental Research Funds for the Central Universities, China. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2021.0327 .

Supply Chain Coordination with Capital-Constrained and Loss Aversion Retailer under Stochastic Demand and Supply

In the face of increasingly complex market environment, supply chain members pay attention to the possibility of obtaining expected profits and various risks while considering profit maximization. The behaviors of decision makers are often influenced by their psychological preferences, and loss aversion is one of the basic characteristics of human economic behavior. We research the supply chain coordination problem with capital constraint and loss-averse retailer in the case of stochastic production and demand. In order to address the loss aversion, a novel utility function is structured according to the theory of mental account. Under wholesale price contract, the optimal expected utility of supply chain under decentralized decision is smaller than that under centralized decision due to the retailer’s constrained capital. Based on that, a model is constructed by making revenue sharing contract act as the dual role of supply chain coordination and delayed payment strategy without seeking external financing or internal financing, and the contract conditions and optimal decisions of the coordinated supply chain are solved. Theoretical analysis indicates that when the contract parameters are properly selected, even though the retailer’s capital is constrained, the revenue sharing contract can not only coordinate the supply chain but also realize the arbitrary distribution of supply chain profits within a certain range. Finally, the change of decision variables and expected utility or profit with contract parameters is analyzed by several numerical examples.

Strategic role of charitable donation in supply chain coordination with consumer prosocial preference

Enterprises commonly make charitable donations to attract customers to purchase their products. We explore the supply chain coordination problem with charitable donation via a Stackelberg game, wherein the e-commerce platform is the leader and the manufacturer is the follower. The former sells the products and decides the commission, whereas the latter determines the charitable donation investment and price. We investigate the charitable donation and pricing strategies in a centralized and decentralized system, and obtain the following insights. (1) The donation and pricing strategies hinges on the proportion of prosocial customers and the donation cost coefficient. (2) Donation can increase the product price and the supply chain performance, unlike non-donation. (3) In the decentralized system with extremely profitable market conditions, charitable donation will aggravate the competition in the supply chain, which benefits the e-commerce platform but hurts the manufacturer. Nonetheless, under certain conditions, the coordination of supply chain can be automatically realized. (4) A simple two-part tariff contract can perfectly coordinate the supply chain.

Production and procurement plans via option contract with random yield and demand information updating

We investigate the production and procurement plans in a two-echelon supply chain consisting of a supplier with random yield and a retailer with stochastic demand. As the production lead time is long, the retailer would purchase options from the supplier to reserve products in advance, and then exercises options or adopts instant order to respond to market changes when demand information is updated. To provide timely order fulfilment, the supplier adopts regular and emergency production policies before and after demand information updating, respectively. We analyze the supply chain coordination problem for two cases: perfect and imperfect market signal. Our study show that a pure option contract only can coordinate supply chain with perfect market signal. For the case of imperfect market signal, we introduce a novel option contract with buyback mechanism to achieve supply chain coordination. Although conventional wisdom shows that such a responsive procurement plan with demand information updating only benefits the retailer while always hurts the supplier, we obtain a different conclusion by demonstrating that the supplier’s performance is improved by demand information updating in the presence of random yield. The intuition is that in face of random yield and demand information updating, the supplier would act conservatively to shed part of the overproduction risk by regular production, and then avoid underproduction risk by emergency production. This reactive production plan with random yield and demand information updating is new and only becomes dominant in some certain conditions. Numerical examples are presented to illustrate theoretical results.

On the Supply Chain Coordination with Trade Credit and Partial Backorder under CVaR Criterion

For the secondary supply chain composed of a supplier with sufficient funds and a retailer with limited funds and risk aversion, to enhance the supply chain stability and comprehensively improve benefits, the supply chain members may choose to implement a supply chain’s coordination strategy. Thus, we study the following supply chain coordination problems, i.e., the supplier provides a trade credit policy and signs a buyback contract for the surplus products with the retailer. For this, based on maximizing the benefits of supply chain members, the supply chain coordination model has been established. By analyzing two participants’ benefit, the supply chain’s optimum coordination mechanism is obtained. The theoretical results are verified by numerical experiments.

Exact Solution of the Optimal Control Problem of Coordinating a Supplier-manufacturer Supply Chain in Advanced Geometric Concepts

Supply chain coordination deals with collaborative efforts of supply chain parties and making globally-optimal decisions that can improve overall performance and efficiency of the entire supply chain. In many situations, the problem of supply chain coordination requires formulation of a continuous time optimal control model, in which optimal solution is identified approximately through numerical estimation. Therefore, in this paper, a novel approach was presented for optimal control problem by developing a new formulation based on advanced ingredients of differential and Poisson geometry. Thus, the exact optimal solution of control problem can be obtained using an analytical methodology that converts the Hamilton-Jacobi-Bellman partial differential equation (PDE) into a reduced Hamiltonian system. The proposed approach was applied to the problem of coordinating supplier development programs in a two-echelon supply chain comprising of a single supplier and a manufacturing firm. For further illustrating applicability and efficiency of the proposed methodology, a numerical example was also provided. The proposed approach offers unique advantages and can be applied to find the exact solution of optimal control models in various optimization problems.

Can a Restaurant Benefit from Joining an Online Take-Out Platform?

In this paper, we study a restaurant’s take-out model choice and the coordination of an online take-out supply chain. To this end, we first derive the restaurant’s optimal price and/or platform’s commission rate under the restaurant’s three possible take-out models: do not provide online take-out service (NTO model), provide take-out service by joining an online take-out platform (TOF model), or provide online take-out service by itself (TOH model). We investigate the restaurant’s optimal take-out model choice. We then derive the optimal decisions of price and the take-out model under centralization, and study the online take-out supply chain coordination problem. We find that, first, the restaurant may not always benefit from providing online take-out service. It will be beneficial only if the incremental demand generated by take-out service is high. Second, under the centralized supply chain, the TOF model is always better than the TOH model. Meanwhile, when the incremental demand is high, the restaurant should choose the TOF model; otherwise, the NTO model is better. Third, we find that the restaurant’s take-out price and model choice decisions under a decentralized supply chain are both inconsistent with that under the centralized supply chain. Last, we design a sales reward contract which can achieve the price and model choice coordination as well as win-win outcomes for all supply chain members.

Coordination in Supply Networks with Combined Topology

The paper considers the problem of supply chain coordination in supply networks using the revenue-sharing contract. The supply network has a combined topology and consists of three levels of participants: manufacturers, a distributor, and retailers. The authors consider the companies' performance improvement as the motivation of companies to operate in coordinating conditions. Simulation of contract conditions is implemented for different types of supply networks: from a simple case to a more complex one. The contract procedure is modeled as a game between two companies. The game solution is a set of contract parameters, providing Nash equilibrium, achieving the maximum of the supply network profit and Pareto-optimality of the obtained solution. The results show the application of revenue-sharing contracts in such networks has several peculiarities: the role of a coordinator in the supply network should be performed by a distributor; the distributor, by setting unified revenue shares for all retailers and manufacturers, gets a share of the expected profit of the supply network, each retailer gets a share of the supply network profit for its sales channel, and each manufacturer gets a share of the supply network profit for its product.

Pricing and market segmentation coordination in a push–pull supply chain with sequentially observed demand

This paper investigates the problem of supply chain coordination where the market is segmented by price differentiation and the demand is sequentially observed. The manufacturer sells a single product to the retailer who offers the product at differentiated prices in primary (full priced) and secondary (discounted) market segments based on customers’ willingness-to-pay (WTP). We explore two scenarios. In the first scenario, referred to as priority scenario, the demand in the primary market segment is observed prior to the secondary market segment. The retailer assigns a higher priority to this market segment and the leftover inventory is sold in the secondary market segment. In the second scenario, referred to as the reservation scenario, the demand in the discounted market segment is observed prior to the demand of the primary market segment. Therefore, the retailer enforces reservation limit to protect the stock for primary market customers with a higher WTP who arrive later. We explore the situation when the demand in primary and secondary market is simultaneously observed and also when the demand information is only partially known. The three coordination schemes, namely, decentralized channel, integrated channel, and revenue -sharing contract via bargaining solution are analyzed and coordination models are developed.

Research on Coordination of Green Supply Chain Based on Blockchain Concept

Based on the concept of blockchain and Stackelberg game theory, the coordination problem of green supply chain under random environment is studied. Firstly, based on the concept of blockchain, green supply chain decision-making models composed of a manufacturer and a single retailer were constructed, in centralized, decentralized, revenue-sharing and green manufacturing cost sharing contract situations. Secondly, models were solved. Finally, the relevant conclusions are verified through simulation analysis and comparison. The study found that the revenue sharing ratio, green manufacturing cost sharing ratio and repurchase coefficient have a significant combined effect on supply chain coordination. When the green supply chain is coordinated, the overall revenue of manufacturers, retailers, and the supply chain under the blockchain concept is higher than that under the non-blockchain concept. Simultaneously, it improves product greenness, retailer’s ordering and the supply chain robustness.

Coordination of a fresh agricultural product supply chain with option contract under cost and loss disruptions.

This paper analyzes the option coordination problem of a fresh agricultural product supply chain under two supply chain structures, when the production cost and the loss rate are disrupted simultaneously. This paper provides the explicit option coordination conditions for the disrupted supply chain under two supply chain structures, and then explores the effects of the disruptions and supply chain structure on the option coordination conditions. The results suggest that it is unfavorable to apply the original coordinating contracts without disruptions to coordinate the disrupted supply chain. The coordination of the disrupted supply chain can be achieved with knowledge of the distribution of demand. In two coordinating contracts for the disrupted supply chain, the exercise price is still at the original level without disruptions while the option price deviates from the original level without disruptions. Moreover, the relationships of the coordination conditions in two supply chain structures depend on the value of the profit allocation coefficient. When the profit allocation coefficient exceeds (falls behind) a certain threshold, the option price is set at a higher (lower) value in the supplier-led supply chain structure than in the distributor-led supply chain structure, while the exercise price is set at a lower (higher) value in the supplier-led supply chain structure than in the distributor-led supply chain structure. Finally, the disrupted supply chain with any supply chain structure will perform better in the modified coordinating contracts than in the original coordinating contracts without disruptions.

Considering the traceability awareness of consumers: should the supply chain adopt the blockchain technology?

Blockchain technology is an emerging technology developed in recent years. It has powerful information traceability function. The blockchain technology plays an important role in monitoring product quality and responding to product safety problems. Under considering the traceability awareness of consumers and the cost of using the blockchain technology, should the supply chain adopt the blockchain technology? The research on this issue deserves great attentions. In this paper, for a three-stage supply chain consisting of a supplier, a manufacturer and a retailer, we study the optimal pricing strategies of the supply chain considering the traceability awareness of consumers in two scenarios. These two scenarios are: scenario N (i.e., the supply chain does not adopt the blockchain technology) and scenario B (i.e., the supply chain adopts the blockchain technology). On this basis, we discuss the conditions that the supply chain adopts the blockchain technology by comparing the optimal profits of the supply chain and its members in two scenarios. Further, we discuss the problem of supply chain coordination when adopting the blockchain technology. The results show that it is conditional for the supply chain to adopt the blockchain technology, and the condition is related to the traceability awareness of consumers, the production costs of the supplier and manufacturer, and the cost of using the blockchain technology. We also find that under a certain condition, the revenue sharing contract can realize a Pareto improvement for the supply chain that adopts the blockchain technology.

The Low-Carbon Supply Chain Coordination Problem with Consumers’ Low-Carbon Preference

In this paper, we study the supply chain coordination problem between a manufacturer and a retailer regarding consumers’ low-carbon preferences. The retailer considers the market demand to determine the order quantity; the manufacturer chooses how to reduce emissions according to the retailer’s order quantity. We consider four cases, including the non-emission abatement, the emission abatement of decentralized decision-making, the centralized decision-making and the retailer providing a cost-sharing contract. By comparing the four cases, we find that the case of a retailer providing a cost-sharing contract can coordinate the supply chain, achieving a Pareto improvement for the manufacturer and retailer. In addition, we use the Rubinstein bargaining model to determine the cost-sharing ratio. Finally, numerical simulations are given to analyze the impact of the cost-sharing ratio on the equilibrium results, including the profit and the emission abatement level. Furthermore, we investigate the impact of the cost-sharing ratio and consumers’ low-carbon awareness on the profits of the members in the supply chain. We find that the equilibrium results, including the order quantity, the emission abatement level and the profits of the members in the supply chain under contract, are higher than the ones under centralized decision-making. The results show that in the higher low-carbon awareness market, retailers should formulate a reasonable cost-sharing ratio to achieve emission reduction coordination.

Channel coordination under Nash bargaining fairness concerns in differential games of goodwill accumulation

We study a supply chain coordination problem with an upstream manufacturer and a downstream retailer that have Nash bargaining fairness concerns. The evolution of consumer goodwill is assumed to be influenced by the final product's quality improvement level (from the manufacturer) and advertising effort level (from the retailer). We determine the optimal strategies by differential game models for centralized, fairness-neutral decentralized, and fairness-concerned decentralized channels under different power structures. A revenue- and cost-sharing contract is also developed to coordinate the fairness-concerned decentralized channels. We show that decision-makers will accept the proposed contract only if the revenue-sharing rate satisfies certain conditions. Comparison discussions, sensitivity analyses of some key parameters, and numerical studies are conducted to provide further insights. We observe that a dominant channel member's sensitivity to fairness is relatively more significant in the decision-making process and channel efficiency. Specifically, each member has a greater incentive to adjust the investment and pricing strategies in the channel that it dominates. Additionally, we find that when the supply chain members are fairness-neutral, no power structure exists that can simultaneously be the most beneficial to the channel with the greatest profit, the lowest selling price, and the most improved quality. However, when the supply chain members are fairness-concerned, conditions exist under which either the retailer- or manufacturer-dominated channel can exhibit optimum performance in all three aspects.

Deconstruction of a Multi‑Embedded Supply Chain Coordination Problem Using Mixed Methods

It is without doubt that there are many overviews of mixed methods research in supply chain management. However, there is relatively little research and representation on the application of robust methodological approaches and techniques that take into account the dynamic nature of a multi‑embedded and specialised medicine supply chain coordination (SCC) problem. In Uganda, the distribution of artemisinin‑based combination therapies (ACTs) involves a multi‑embedded supply chain that runs across the macro, market, and micro levels of stakeholders. The multi‑embedded levels have created a coordination challenge tied to stock‑outs and unavailability of ACTs to the detriment of the patients. This study aimed to: 1) demonstrate how a mixed methods approach facilitated a better understanding of a multi‑embedded and specialised supply chain coordination problem, and 2) reveal the major factors for coordinating a multi‑embedded supply chain that can improve the availability of ACTs in the general hospitals of Uganda. An exploratory sequential mixed method approach was employed to disentangle the problem. In the first phase, focus group discussions were predominantly used to collect qualitative data, the findings of which acted as the foundation for the quantitative survey questionnaire. A Confirmatory Factor Analysis was used to determine and validate the market and macro supply chain dimensions that emerged from the survey results. The results showed that the most influential supply chain market environment dimensions that affect the availability of ACTs include information sharing with external stakeholders and supply chain interdependence. The results from the macro‑environment showed that the socio‑cultural, economic, technological, and legal dimensions influence the availability of ACTs. The contribution of this paper advances the use of mixed methods in deconstructing a complex embedded supply chain problem with implications for supply chain academics and practitioners and government bodies.

Peer Teaching: A Pedagogic Method for Higher Education

Teaching the concepts of numerical courses is a significant challenge for engineering and the management students with innovative teaching pedagogy. Engineering and management education requires pedagogies that provide conceptual framework and that develop analytical and decision making skills to prepare students to face the complex problems. Class room dynamics add values to learning among students. Activities chosen by the professor can be central to many progressive learning experiences. Therefore, we experimented peer teaching methodology for post graduate management students (MBA) for teaching supply chain management concepts and application through a simulation game called “Beer game”. The Beer Game players’ experiences typical supply chain coordination problems, wherever information sharing and collaboration is missing. As a part of the peer group learning initiative, the senior batch students were encouraged to play the game with their juniors. Game demonstrates that communication gap and lack of collaboration can leads to an effect called “the bull whip effect” in the supply chain due to varying inventory levels at each link in the supply chain. Additionally, it was also intended for the students to develop their critical thinking, complex problem solving, leadership, negotiation, collaboration and communication skills in the process. Study results demonstrated a statistical significance in learning outcome, participant satisfaction. Learners results have shown a greater and high learning levels for the peer teachers. This peer teaching approach can be recommended to incorporated in teaching pedagogy for engineering and management students as one of the active learning method.