Three-echelon Supply Chain Model Research Articles

Engine option in aircraft purchase: Company strategies and policy implications

Airlines select an aircraft’s engine simultaneously while purchasing the aircraft. Usually, an aircraft model has multiple engine options, but recently the number of engine options has been decreasing. We develop a three-echelon supply chain model including engine manufacturers, aircraft manufacturers, and airlines to analyze the engine options in airlines’ new aircraft purchases. We show that given an airline’s existing fleet composition, larger fleet size and higher aircraft production efficiency would make it more likely to choose multiple engine options. In contrast, higher production costs and engine substitutability would lead to a shift to a single engine or hinder the airline’s fleet expansion. In the model, we highlight the impact of MRO (Maintenance, Repair, Overhaul) costs with economies of scale on airline engine option decisions as well. In particular, our theoretical findings suggest that the airline would buy more aircraft that are the majority types in their existing fleets, thus crowding out the minority ones. Our findings provide a reasonable explanation for the homogeneity of engine options and provide policy implications regarding airline expansion and aviation supply chain development.

Reducing emissions from production and distribution in three-echelon supply chains

Reducing carbon emissions is one of the key goals of contemporary supply chains and logistics. This paper aims to formulate a novel three-echelon (supplier-3PL-retailer) supply chain model comprising green technology investment, variable demand, variable lead time, a dynamic shipping strategy, and an option for vehicle selection. The demand function considers the product's freshness index and maximum lifetime, along with the availability of stocks. Besides, the delivery from the 3PL to the retailer is dynamically determined based on previous shipment information. A green vehicle is selected using a multi-criteria decision-making (MCDM) technique based on q-alternatives with n-characteristics for the transportation process and mathematically we link this selection process to traditional three echelon supply chain optimization problem. The results show that combining green investment with an appropriate dynamic shipping strategy by using a selected green vehicle reduces the supply chain's emissions and total integrated cost. Furthermore, reducing lead time without compromising other supply chain factors stimulates demand of customers and produces fewer emissions with a significant reduction in the total integrated cost. A real-case-based study shows the performance of the proposed model and method.. The study illustrates that 47.744% of the carbon emissions in Scenario 1 and 47.53% in Scenario 2 are reduced when an emission reduction strategy is implemented. In terms of total integrated costs our proposed model could save 4.85% cost in Scenario 1 while 4.96% for Scenario 2, which is significant.

An inventory analysis in a multi-echelon supply chain system under asymmetry fuzzy demand: a fmincon optimization

In this article, the three-echelon supply chain model is developed with a single supplier, a single vendor and a single buyer in a fuzzy environment. The three-stage inspection technique is considered at the end of the vendor's process to supply high-quality products to the buyer. Moreover, the demand rate of the product in the market is often assumed to be uncertain, and accordingly, in this paper, the uncertainty is handled using fuzzy numbers. The primary goal of this model is to minimize the overall inventory cost relative to the asymmetry hexagonal fuzzy demand. Additionally, a backorder strategy is incorporated to gain customer satisfaction and reduce lost sales. To validate this model, numerical examples are tested and constrained non-linear optimization (i.e. fmincon solver) is performed to derive the optimal solution for the decision variables. Finally, conclusions with potential future directions are provided.

Three-Echelon Supply Chain Management with Deteriorated Products under the Effect of Inflation

A business can be properly managed globally when it is under a supply chain. When it is a global supply chain, inflation has a huge effect on supply chain profit. Another important factor is the deterioration of products. Products can deteriorate during storage or transportation, which badly affects each supply chain player. This study develops a three-echelon supply chain model through which products can be delivered to customers easily. In this model, one producer and multiple buyers are considered, and each buyer has a separate group in which multiple suppliers have been taken. Inflation is also added to the model for inflationary fluctuations. To understand this model in real life, a numerical example is discussed and the total profit from the supply chain is extracted. Sensitivity analysis is also shown at the end of the model to find out the effect on the model due to changes in some parameters that affect this model highly. After developing this model, it was found that if the inflation rate falls, then the total profit will increase continuously. On the contrary, if the inflation rate increases, then, in this situation, the total profit will decrease continuously. At present, vaccine makers’ total profit can support the economy of any country, and in this model, the inflation rate decreases as profit increases.

A humanitarian cold supply chain distribution model with equity consideration: The case of COVID-19 vaccine distribution in the European Union

This research develops a humanitarian cold supply chain model with equity consideration for COVID-19 vaccine distribution during a pandemic, considering deprivation cost and an important social concept named equity. The proposed comprehensive plan minimizes all incurred costs, including transportation costs, shortage costs, deprivation costs, and holding costs, while aiming at eliminating infection and mortality rates. The proposed three-echelon supply chain model includes suppliers, distributors, and affected regions (ARs), as destinations. We apply the proposed model to the actual vaccine distribution data during the COVID-19 outbreak in Europe. A mixed integer programming (MIP) model is developed to minimize the costs and satisfy the demand goals in the vaccine distribution plan. A sensitivity analysis demonstrates how total and deprivation costs affect each other, helping the managers establish a trade-off between them. The results show that appropriate supply chain planning can minimize logistics and social costs. The proposed model can help policymakers, and decision-makers better understand the importance of equity and implement a fair distribution of vaccines, considering the deprivation cost as a social cost.

Fuzzy adaptive control technique for a new fractional-order supply chain system

The current study presents a new fractional-order three-echelon supply chain model. The chaotic behaviour of the proposed model is demonstrated, and after its synchronization is studied. To this end, a new control technique is offered for the proposed fractional-order system. In the design of the controller, it is assumed that all parameters of the model are unknown. Hence, the proposed sliding mode controller is equipped with an adaptive mechanism, which estimates all unknown parameters of the controller. On the basis of the Lyapunov stability theorem and Barbalat’s lemma, the stability of the system is proven. In order to enhance the performance of the proposed controller and prevent the probable chattering phenomenon which could occur due to the discontinuous function in the sliding mode controller, a fuzzy controller is proposed along with the main controller. Not only is the offered controller robust against uncertainties, but also it is able to estimate parameters of the systems and avoids chattering in the system. Finally, the proposed controller’s excellent performance for synchronization of the fractional-order three-echelon supply chain system is demonstrated through numerical results.

Three-echelon supply chain model in an imperfect production system with inspection error, learning effect, and return policy under fuzzy environment

This article presents a three-echelon supply chain (SC) model, incorporating a single supplier, a single manufacturer, and a single wholesaler under fuzzy system. Three scenarios have been considered: (a) the learning effect (LE) of the employees on the production cost as well as the return contract (RC) between the supplier and an outside supplier and also between the manufacturer and the wholesaler, (b) without considering the LE on the manufacturing expenses and (c) without the RC between the SC players. The goal of this paper is to study the effect of the LE and the RC on total profit of the SC for centralised and decentralised cases. To adopt flexibility of the demand parameters of the entire process, we develop a fuzzy mathematical model of the proposed SC problem. To discuss the novelty of the proposed model, we insert a table of authors’ contribution and also perform numerical illustrations with the help of LINGO software and make a comparative study between the optimal results of the existing method and the proposed fuzzy approach. Sensitivity analysis and graphical illustrations have also been done for better realisation of the model followed by conclusion.

Channel Coordination Among the Members in a Three-Echelon Supply Chain Model for Price, Quality and Advertising Sensitive Demand with Some Sub-supply Chain Strategies

Channel Coordination Among the Members in a Three-Echelon Supply Chain Model for Price, Quality and Advertising Sensitive Demand with Some Sub-supply Chain Strategies

Optimal Subsidies for Development Supply Chains

Problem definition: When donors subsidize products for sale to low-income families, they need to address who to subsidize in the supply chain and to what extent and whether such supply chain structures as retail competition, substitutable products, and demand uncertainty matter. Academic/practical relevance: By introducing and analyzing development supply chains in which transactions are commercial but subsidies are needed for affordability, we explore different supply chain structures, with product substitution and retail competition motivated by a field study in Haiti of subsidized solar lantern supply chains. Methodology: We incorporate product substitution, retail competition, and demand uncertainty in a three-echelon supply chain model with manufacturers, retailers, and consumers. This model has transactions among the donor, manufacturers, retailers, and consumers as a four-stage Stackelberg game, and we solve different variations of this game by using backward induction. Results: The donor can subsidize the manufacturer, retailer, or customer as long as the total subsidy per unit across these echelons is maintained at the optimal level. Having more product choice and having more retail channel choice can increase the number of beneficiaries adopting the products; this increase becomes more pronounced as demand becomes more uncertain. Managerial implications: Donors must coordinate across different programs along the entire supply chain. They should look for evidence in their collective experience of more beneficiaries when subsidizing competing retailers selling diverse substitutable products.

A supply chain model under return policy considering refurbishment, learning effect and inspection error

This article presents a three-echelon supply chain model consisting of a supplier, manufacturer, and a retailer, considering the return contract between the manufacturer and the retailer. Here, the manufacturer has two adjacent production units - the main production unit and a refurbishment unit. The main production unit of the manufacturer is imperfect, which produces an admixture of perfect and defective items. He inspects all the products immediately after production and sells good quality items to the retailer. The retailer receives a proportion of faulty products from him due to his erroneous inspection process, which he returns after inspection. The manufacturer sends all the defective products received from the retailer and the main production unit to the refurbishment unit for reworking. Moreover, the learning effect of the employees on the production cost is considered. Under these circumstances, the cost functions of each of the supply chain players have been derived. Finally, the applicability of the proposed model has been shown using a numerical example. The sensitivity analysis has been presented to study the effect of the parameters on the optimum decision variables.

A three-echelon supply chain model with price and two-level quality dependent demand

This paper considers a three-echelon supply chain model with one supplier, one manufacturer and one retailer for trading a single product. We assume that the market demand at the retailer’s end is stochastic, but dependent on price and quality of the product. The final product’s quality depends on the manufacturing process and the raw material’s quality. We first develop models for centralized and decentralized scenarios. Then we try to coordinate the decentralized system with some contract mechanism. We show that revenue sharing contract is not able to coordinate the system, but a composite contract comprised of sales rebate and penalty (SRP) with return is able to coordinate the system. Finally, we illustrate the developed model with a numerical example and show the efficiency of SRP with return policy. We graphically show the effects of various model-parameters on the optimal decisions. Most of the existing literature’s focus on the quality of the finished product, but in this model we incorporate the quality of the raw material as a decision variable along with the finished product quality. We also able to coordinate the three echelon model with a composite contract which is seldom addressed in the existing literatures.

Three-echelon supply chain model considering carbon emission and item deterioration

This study considers an integrated three-echelon supply chain with carbon emissions from transportation and warehousing, as well as disposing of the deteriorated items. It is assumed that transportation and emission reduction policies affect fuel consumption, which in turns affects costs and carbon emissions. The proposed model simultaneously optimizes the number of deliveries and the delivery size from a supplier to a third-party logistics service provider (3PL), and from the 3PL to the buyer in a three-echelon supply chain model considering deterioration and carbon emission. A numerical example and sensitivity analysis are presented to illustrate the proposed model. The result shows the benefit of supply chain integration in terms of total supply chain cost and carbon emission reduction.

An integrated production-distribution planning of dairy industry - a case study

In dairy, where the product shelf life is too short, integrated production and distribution (P-D) planning is one of the important decision making area. This paper basically discusses one such P-D planning of an Indian milk industry. A three-echelon supply chain model is developed including suppliers, plant and retailers. Fluid milk products and milk made products are the two product families that are produced by the plant, where several important issues are considered with P-D planning like, deterioration rate of raw milk and final products, cost related issues of raw milk, transportation, collection, production, inventory, set up, and time related issues in late or early delivery of the final products to retailers. This model, in fact includes both production scheduling and distribution scheduling. A mixed integer linear programming (MILP) model is used to formulate the above situation to maximise the overall profit contribution of the business. The MILP is solved by using OPL language in CPLEX, and a comparison is made with the current business situation and the improved condition through sensitivity analysis of the collection; production and distribution parameters.

An integrated production-distribution planning of dairy industry - a case study

In dairy, where the product shelf life is too short, integrated production and distribution (P-D) planning is one of the important decision making area. This paper basically discusses one such P-D planning of an Indian milk industry. A three-echelon supply chain model is developed including suppliers, plant and retailers. Fluid milk products and milk made products are the two product families that are produced by the plant, where several important issues are considered with P-D planning like, deterioration rate of raw milk and final products, cost related issues of raw milk, transportation, collection, production, inventory, set up, and time related issues in late or early delivery of the final products to retailers. This model, in fact includes both production scheduling and distribution scheduling. A mixed integer linear programming (MILP) model is used to formulate the above situation to maximise the overall profit contribution of the business. The MILP is solved by using OPL language in CPLEX, and a comparison is made with the current business situation and the improved condition through sensitivity analysis of the collection; production and distribution parameters.

Effect of variable transportation and carbon emission in a three-echelon supply chain model

Several industries controls carbon emission during transporting products due to increased transportation for obtaining the best transportation way with reduced cost. This study considers a three-echelon supply chain model where the supplier makes semi-finished products and transports to manufacturer for finished products. The manufacturer transports products by single-setup-multi-delivery policy to multi-retailer. The aim of the model is to reduce the supply chain cost by considering variable transportation and carbon emission costs are considered due to several shipments. An algebraic approach is employed to obtain the closed-form solution. Numerical example, sensitivity analysis, and graphical representations are given to illustrate the model.

Lead time aggregation: A three-echelon supply chain model

In this paper, destructive effects of upstream aggregated stochastic lead times on the supply chain (SC) performance are analyzed. For this purpose, a three-echelon SC consisting of one producer, one distributor, and one retailer is modeled. Both the producer and distributor face stochastic lead times, which can be also aggregated to create a long unpredictable lead time. In order to scale down shortages at the retailer site, an incentive scheme is proposed to convince the upstream members to increase their reorder points. Applying the coordinated model considerably increases the total profit earned by the whole SC as well as all SC members.

Multiple commodity supply chain with maximal covering approach in a three layer structure

Many scholars have already investigated the location problem of supply chain facilities and centres under different conditions. In a three-echelon multiple commodity supply chain, the aim is to fulfil customer demand at a minimum cost by optimising the flow of products from factories to distribution centres (DC) and from DCs to customers. In a situation where there are limited numbers of DCs and each of them covers bounded area, locating DCs for the purpose of, maximising coverage of customers' demand and optimising allocation of the customers to those centres, are quite important. In this research, a three-echelon multiple commodity supply chain model with maximal covering approach that meets the following two objectives through appropriate selection of DC sites is presented: 1) maximise coverage of customer demand; 2) minimise the associated transportation cost required for fulfilment of the customer demand. To address such models in small scales, one can easily apply LP-metric method to make a combined dimensionless objective and solve it with lingo software. Considering the fact that the presented model is an NP-hard problem and cannot be solved in this manner, we apply customised version of a heuristic algorithm named Greedy and clearly indicate its robustness.

Integrated defective production model for impatient customers with price dependent demand under the effect of learning

In this paper, a three-echelon supply chain model has been explored, comprising of a supplier, a producer and a retailer where demand rate is functionally related to the selling price. In this study, it is assumed that customers are impatient in nature so shortages occur at the end of retailer. Production process assumes to be imperfect and defective items reworked and available for sale as good ones. Number of defective items present in supplier end follows the learning curve. The model has been explored numerically as well, an optimal solution has been obtained and the sensitivity of that solution has also been checked with respect to various system parameters. The final outcome shows that the model is not only stable but also economically feasible.

Research and Simulation of Supply Chain Disruption Based on Contract

In order to research the long-term disruption influence on supply chain and the performance that contracts exert on supply chain when disruption happens, this paper constructs a VMI three-echelon supply chain model based on system dynamics. Through dynamic simulation of the model, the total inventory, total profit and market demand shortage data are respectively collected under conditions of no disruption, manufacture disruption and transport disruption. By descriptive statistical analysis of these data, we find the disruption has secular and hysteretic effect on the supply chain. Furthermore, T test is used to testify the contracts effectiveness on the supply chain under disruption conditions. These analytical results show that quantity discount contract and revenue sharing contract can effectively relieve the negative influence on the supply chain when disruptions happen, since they not only enhance the total profit but also stabilize the fluctuation of the supply chains total inventory, whereas the contracts do not perform well in satisfying the market demand shortage.

Modeling and distributed simulation of supply chain with a multi-agent platform

A supply chain is a complex adaptive system that is very difficult to analyze, in particular, with respect to its dynamics, stochastic, and uncertainty. The traditional analytical model is unable to cope with these characteristics of supply chain. In addition, the analytical model may not be solved due to its complexity and nonlinearity. Simulation, especially the multi-agent-based distributed simulation, is one of the most effective tools to model and analyze supply chain. In this paper, a multi-agent platform framework with multi-layers for modeling and distributed simulation of the complex supply chain is presented. In this platform, generic agents for modeling entities in supply chain are described and a novel simulation modeling approach enabled by the platform is proposed. The platform provides a flexible environment for defining, deploying, simulating, and displaying agent-based simulation models and enables users to instantiate generic agents to model their required simulation models rapidly. A three-echelon supply chain model is developed and simulated to illustrate the use of the simulation platform.