Three-layer Supply Chain Research Articles

Three stage trade credit policy in a three-layer supply chain–a production-inventory model

The main purpose of this paper is to investigate the optimal replenishment lot size of supplier and optimal production rate of manufacturer under three levels of trade credit policy for supplier–manufacturer–retailer supply chain. The supplier provides a fixed credit period to settle the accounts to the manufacturer, while the manufacturer gives a fixed credit period to settle the account to the retailer and the retailer, in turn, also offers a credit period to each of its customers to settle the accounts. We assume that the supplier supplies the raw material to the manufacturer and sends back the defective raw materials to the outside supplier after completion of inspection at one lot with a sales price. The system always produces good items in the model. Also, we consider the idle times of supplier and manufacturer. Finally, numerical examples are provided to illustrate the behaviour and application of the model with graphical simulation.

Optimization of Port Supply Chain Super Network under Electronic Commerce

This paper establishes a three-layer port supply chain super network model for multiple decision criteria which consists of M suppliers, N port agents and K customers. The establishment of the model is based on the principles of competition in the same layer and cooperation between different layers. Then, from the perspective of suppliers, port agents and customers, we respectively model the optimizing behavior of the various decision makers by using variational inequalities, and we derive the equilibrium conditions of the entire supply chain by using improved projection algorithm. Finally, we prove the feasibility of the model by experiment.

Three-layer supply chain – A production-inventory model for reworkable items

This article develops an integrated production-inventory model considering perfect and imperfect quality items, product reliability and reworking of defective items in the environment of supply chain management. Manufacturer, supplier and retailer are the members of the supply chain where supplier delivers raw materials to the manufacturer and sends back the defective raw materials after completion of inspection at a single lot with less market price. In this system, production starts to produce good items at the beginning of the production. The production system may undergo an “out-of-control” state from an “in-control” state, after a certain time that follows a probability density function. The density function varies with reliability of the machinery system that may be controlled by new technologies, investing more capital. The defective items produced in “out-of-control” state are reworked at a cost just after the regular production time. This model considers the impact of business strategies such as optimal order size of raw materials, production rate and unit production cost, and idle times in different sectors in a collaborating marketing system. An analytical method is employed to optimize the production rate and raw material order size for maximum expected average profit. A numerical example along with four graphical illustrations is considered and its sensitivity analysis is provided to test feasibility of the model.

A collaborating inventory model in a supply chain

The present article investigates an economic order quantity/ economic production quantity model in three-layer (manufacturer, vendor and retailer) supply chain management. In each stage, the products may undergo non-conforming quality items which have less value in the market. This model maximizes a collaborating expected profit function while production rate, order quantity, number of shipments with equal sizes are decision variables and unit production cost is a function of production rate. Numerical example is illustrated to test the model.

Impact of Reseller's Forecasting Accuracy on Channel Member Performance

This paper studies a three-layer supply chain where a manufacturer sells product through a reseller who then relies on its own salesperson to sell to the end market. The reseller has superior capability in demand forecasting relative to the manufacturer. We explore the main tradeoffs between the risk-reduction effect and the information-asymmetry-aggravation effect of the improved forecasting accuracy. We show that under the optimal wholesale price contract, both the manufacturer and the reseller are always better off as the reseller’s forecasting accuracy improves. Nevertheless, under the menu of two-part tariffs, the manufacturer prefers the reseller to be either uninformed or perfectly informed about the market condition. We further find that the improved forecasting accuracy is beneficial for the reseller if its current forecasting system is either very poor or very good.

Integrated inventory model for three-layer supply chains with stochastic demand

In this paper, we consider three-stage inventory production system in three-layer supply chain with equal-sized shipments and incorporating raw material procurement. The vendor converts raw material, which is ordered from supplier, to finished product and delivers it to the buyer. We assume that the demand in buyer’s side is stochastic and shortage is allowed. The objective is to minimise the expected total cost incurred by the vendor and the buyer. We derive expected total joint cost function and propose solution procedure to determine the optimal policy. Finally, we present numerical examples to illustrate the significance of cost reduction of the integrated model in comparison with independent model.

An improved algorithm and solution on an integrated production-inventory model in a three-layer supply chain

Ben-Daya et al. (2010) established a joint economic lot-sizing problem (JELP) for a three-layer supply chain with one supplier, one manufacturer, and multiple retailers, and then proposed a heuristic algorithm to obtain the integral values of four discrete variables in the JELP. In this paper, we first complement some shortcomings in Ben-Daya et al. (2010) , and then propose a simpler improved alternative algorithm to obtain the four integral decision variables. The proposed algorithm provides not only less CPU time but also less total cost to operate than the algorithm by Ben-Daya et al. (2010) . Furthermore, our proposed algorithm can solve certain problems, which cannot be solved by theirs. Finally, the solution obtained by the proposed algorithm is indeed a global optimal solution in each of all instances tested.

The Research of United Scheduling and Coordination in Three-Layer Supply Chain Model

With the rapid development of the global economy, more and more enterprises emphasize on the coordination with the partners to improve the supply chain competitive capability. This paper focuses on the united scheduling of the three-layer supply chain and the coordination mechanisms of agile supply chain. The objective is to minimize the total transportation cost and improve the customer’s service level, which is achieved by scheduling the jobs and delivering them to the next stage in batches. Based on the features of the optimal scheduling, a dynamic programming algorithm is proposed.

A production-inventory model of imperfect quality products in a three-layer supply chain

In this paper an integrated production-inventory model is presented for supplier, manufacturer and retailer supply chain, considering perfect and imperfect quality items. This model considers the impact of business strategies such as optimal order size of raw materials, production rate and unit production cost, and idle times in different sectors on collaborating marketing system. The model can be used in industries like textile and footwear, chemical, food, etc. An analytical method is employed to optimize the production rate and raw material order size for maximum expected average profit. An example is illustrated to study the behavior and application of the model.

An integrated inventory production system in a three-layer supply chain

With growing focus on supply chain management, firms realise that inventories across the entire supply chain can be more efficiently managed through greater co-operation and better co-ordination. This paper deals with inventory and production co-ordination in a three-layer supply chain involving suppliers, manufacturers and retailers. Each stage may have more than one firm. It is assumed that the cycle time at each stage is an integer multiple of the cycle time of the adjacent downstream stage. In addition, the produced lot at each stage is sent to the adjacent downstream stage in equal shipments. Shipments are sent as soon as they are produced and there is no need to wait until a whole lot is produced. A cost minimisation model and its solution procedure are derived. A numerical example is presented for illustrative purposes. This policy leads to considerable savings as compared to the scheme that allows shipments only after the whole lot is produced.