Time Sensitive Demand Research Articles

A Stackelberg game on production planning of make-to-order manufacturing supply chain with fuzzy parameters

This paper considers a game-theoretic approach in analyzing a single manufacturer-multiple supplier make-to-order supply chain with fuzzy parameters involved. Under the supply chain exists an exclusive supplier for every component required by the manufacturer. The manufacturer may also opt for a third-party subcontractor to produce a portion of its demand. The interactions and decisions between the manufacturer and its suppliers are determined in multiple time periods. We assume that the supply chain faces a price and lead time-sensitive demand.

Exploring Omni-channel supply chain under price and delivery time sensitive stochastic demand

ABSTRACTThis paper develops a two-level Omni-channel supply chain under price and delivery time sensitive additive stochastic demand. Retailer operates a direct online channel along with its traditional retail channel to satisfy wider range of consumers’ demand. Beside the price and stocking decisions for both the retail and the online channels, delivery lead time of online channel is also assumed as a decision variable because a longer delivery lead time diminishes customers’ acceptance and faithfulness to the online channel. Optimal stocking decisions are essential to control shortages or overstocks due to uncertain demand in both retail and online channels. The model depicts that delivery lead time has an adverse effect on online selling price as well as on online channel profit. The optimal delivery lead time decreases if lost sale due to delivery time increase. The article also analyses product compatibility range for successful operation of Omni-channel supply chain. The model is also illustrated through a numerical example.

Inventory model with expiration date of items and deterioration under two-level trade credit and preservation technology investment for time and price sensitive demand: DCF approach

In this cut-throat competitive business world, cash-on-delivery is no longer a practice. Consequently, the retailer offers numerous short-term or long-term credit limits to the customer. The middle-layered player passes the offer of delay payment to the end users. In addition, most of the items have a fixed lifetime and deteriorate continuously, which cannot be sold after its expired dates. However, preservation technology investment can reduce deterioration rate of items in retailer's inventory system. In this paper, an inventory model is formulated when retailer offers partial credit, which he received from the supplier when demand is decreasing with time and price. The profit function is constructed using inflation rate and risk involved due to offer of credit period in generating revenue. The decision policies are analysed for the decision maker. Numerical examples are used to demonstrate the theoretical derivations. Sensitivity analysis is carried out for the advantageous scenario depending upon the lengths of the credit periods.

Inventory model with expiration date of items and deterioration under two-level trade credit and preservation technology investment for time and price sensitive demand: DCF approach

Inventory model with expiration date of items and deterioration under two-level trade credit and preservation technology investment for time and price sensitive demand: DCF approach

Imperfect production inventory model for time and effort dependent demand under inflation and maximum reliability

ABSTRACTThis paper analyses an economic production quantity (EPQ) model with time and advertisement sensitive demand with the effect of inflation when defective items are produced. In every manufacturing sector, some problems (like labor problems , machine breakdown, etc.) may arise in production system in long run. Due to this, imperfect or defective items are produced. These defective items are reworked to get fresh items again. This rework process is done at some cost. To reduce this additional rework cost some improvement in product reliability is very much needed. Keeping these facts in mind we have incorporated reliability as decision variable in our model. The objective of the model is to maximise profit function with respect to reliability parameter. We have used Euler-Lagrange method to optimise profit function. The problem is validated by numerical example and effects of inventory parameters are studied by sensitivity analysis.

A two-price policy for a newsvendor product supply chain with time and price sensitive demand

In technology-related industries, such as smartphones manufacturing, two phenomena can be observed for the products: the first is the obsolescence of an existing product, usually due to the appearance of a new product which decreases the attractiveness of the existing one; the second is the stochastic nature of the market demand and its price sensitivity. These two imply that the demand decreases over a product's lifecycle, and thus, the manufacturer and/or retailer may need to decline the retail price of the product during its lifecycle. In this paper, we assume that a dominant manufacturer wholesales a technological product to a retailer who has single or two buying opportunities. For either single- or two-buying-opportunity setting, we consider two models: (1) the retailer decreases the retail price at the product's midlife with no compensation from the manufacturer; (2) the manufacturer provides a rebate to the retailer for the retail price decline at the midlife. For the two-buying-opportunity setting, the rebate is that the manufacturer decreases the wholesale price at the midlife. The variables include the manufacturer's wholesale price and rebate, the retailer's order quantities and retail prices. We also compare the performance of the proposed models to the wholesale-price-only and the buyback policies.

An integrated production-inventory model with preservation technology investment for time-varying deteriorating item under time and price sensitive demand

This paper deals with a supply chain comprising of single vendor and single buyer who sells single product which is deteriorating in nature. The deterioration is time dependent. The buyer invests funds on preservation technology to preserve the item and reduce deterioration rate in the inventory. The classical optimisation is used to optimise the total profit of the supply chain with respect to selling price, cycle time and investment for preservation technology. The manufacturer production process is not perfectly trustworthy; it may shift from an in control state to an out of control state at any random time during a production run and made some imperfect items. The vendor follows lot for lot policy for refill produced to the buyer. The model is supported with numerical examples and also established a scenario of the model. Sensitivity analysis is done to deduce managerial insights.

Optimal Replenishment Policy for Deteriorating Items with Time Sensitive Demand Under Trade Credit Financing

SYNOPTIC ABSTRACTIn this study, we have formulated an inventory model for deteriorating items with trade credit financing under profit maximization criteria, considering the demand as a linear function of time. Optimal solution procedures to find the optimal order quantity and cycle time are discussed. Several numerical examples are provided for the proposed model in order to illustrate the solution procedure. Sensitivity analysis of the optimal solution with respect to various parameters of the system is carried out, and the managerial implications are discussed in detail.

A comparative study of optimal replenishment policy for a retailer in declining market

The aim of this article is to provide an analytical solution to a retailer whether to adopt positive stock on hand or stockless inventory policy. Mathematical models are developed for both the policies for a product with price and time sensitive demand to maximise the profit functions. Here, unlike the conventional inventory models with pricing strategy, which were restricted to pre-specified replenishment or pricing cycle times and hence fixed number of price changes over the finite time horizon, we allow the number of price changes to be a decision variable for both policies. Within a fixed planning horizon, existence and uniqueness of optimal solutions are verified. A solution procedure is presented to determine optimal inventory policy and corresponding optimal prices, optimal number of pricing cycles, optimal lot size and optimal profit simultaneously. Numerical examples are provided to illustrate the development of the models.

Optimal Guaranteed Service Time and Service Level Decision with Time and Service Level Sensitive Demand

We consider a two-stage supply chain with one supplier and one retailer. The retailer sells a product to customer and the supplier provides a product in a make-to-order mode. In this case, the supplier’s decisions on service time and service level and the retailer’s decision on retail price have effects on customer demand. We develop optimization models to determine the optimal retail price, the optimal guaranteed service time, the optimal service level, and the optimal capacity to maximize the expected profit of the whole supply chain. The results of numerical experiments show that it is more profitable to determine the optimal price, the optimal guaranteed service time, and the optimal service level simultaneously and the proposed model is more profitable in service level sensitive market.

Scheduling and optimal delivery time quotation for customers with time sensitive demand

Abstract In this research, we study a supply chain which consists of a firm and a set of customer groups, where the demand (order quantity) from each customer group depends on the quoted delivery time. The prices of the product are determined and different to each customer group. The firm's objective is to maximize the profit by quoting different delivery times for all customer groups. A mathematical model is developed, which is proved to be NP hard. Both a mixed integer programming (MIP) formulation and the branch-and-bound algorithm are proposed to study the moderate size of the problem. Also, a heuristic algorithm is developed which is able to obtain the optimal solution quickly in most of cases when customer size is less than 20.

Coordinating a manufacturer–retailer chain under time and price dependent demand rate

This paper deals with the coordination of a supply chain that consists of a manufacturer and a price setting retailer. The manufacturer offers a single product to the retailer, who faces time and price sensitive demand. Under explicit cost information, optimal quantity–price pairs are derived for an integrated scenario and a decentralized scenario by considering the manufacturer as the Stackelberg leader. It is shown that a conventional revenue sharing contract does not coordinate the chain. Then a coordination contract is used – with a fraction of the retailer's generated revenue, the manufacturer also shares a fraction of the retailer's cost and it is shown that the coordination contract cuts out channel conflict and leads to a win–win result. The revenue sharing fraction, wholesale price and range of cost sharing fraction, within which a win–win result is possible, are determined in exact form. A numerical example is presented to explain the proposed model.

MULTI-OPTIONS BIDDING STRATEGY IN DISTRIBUTED ENVIRONMENT

When a Make-To-Order (MTO) enterprise receives a bidding invitation from a customer, he does not know the demand is price-sensitive or time-sensitive. In order to increase the possibility of winning this contingent order, the enterprise tenders his bid with two options characterized with price and delivery time. One is for time-sensitive demand, and it ensures that the products will be delivered as soon as possible. The other is for price-sensitive demand, and it ensures that the products will be produced at the lowest cost. The enterprise is comprised of several plants that jointly produce custom products and each plant's decision is made in a distributed way. Hence, the enterprise has to coordinate the production plans of these plants to generate the two options. Since Analytical Target Cascading (ATC) can solve multi-level hierarchical distributed problem and its convergence is proven, it is adopted to coordinate the plants' planning. This paper proposes a unique bidding option generating process in which an extended ATC model is utilized to produce time-sensitive and price-sensitive options by adjusting the coefficient of delivery tardiness. The numerical study in this paper demonstrates (1) the extended ATC model works effectively; (2) ATC with augmented Lagrangian relaxation (AL-ATC) is more effective in producing solutions than ATC with quadratic penalty function (QP-ATC); (3) ATC is an effective coordination tool by comparing the solutions made by ATC and All-In-One (AIO).

Supply Disruption and Reactive Strategies in an Assemble-to-Order Supply Chain With Time-Sensitive Demand

This paper addresses the comparison and selection decision of reactive strategies for supply disruption management. We consider an assemble-to-order supply chain with one manufacturer who employs a single-sourcing strategy for each kind of component. The manufacturer assembles products for customers using components purchased from the suppliers in a just-in-time environment. Demand for the products is time-sensitive. We propose and compare three pure reactive strategies and two dynamic reactive policies for managing supply disruption. In the pure reactive strategies, only one kind of strategy is adopted during the disruption. But strategies adopted in the dynamic pure reactive policies change with the passage of time during the disruption. In the dynamic mixed strategy with customer choices, the manufacturer can use both backup source to offer on-time delivery and compensation policy to compensate customers for waiting in each period during the disruption. We find that the backup sourcing strategy is preferred at the beginning of the supply disruption, while the compensation strategy is preferred as time elapses. The dynamic pure strategy is superior to any other pure reactive strategies. The dynamic mixed strategy with customer choices is superior to the pure backup sourcing strategy. The backup cost and customer sensitivity are two determining factors in the manufacturer's choice of the reactive strategies.

Optimal coordinated supply chain strategy with price and time sensitive demand

In this study, inventory models are developed for coordinated supply chain using Stackelberg game framework. In the proposed model, customer demand is assumed to be price and time sensitive. The buyer attempts to adjust retail selling prices by charging premium or offering discount to the floor selling price depending upon the optimistic or declining market conditions. The aim of this research paper is to analyse the optimal pricing policy that maximises total profit for both the players under the principles of coordination, and competition. Some numerical examples are given to study the model. The results show that the vendor gets more advantage when the collaborative model is applied and the buyer’s profit is bigger in the Stackelberg game model than the collaborative model.

Optimal discount time for seasonal products with trapezoidal type price and time sensitive demand pattern

The trapezoidal type demand rate with respect to time allows three-phase variation, representing the growth, the steady and the decline phases of demand with respect to time commonly experienced by most seasonal products during their life cycle in the market. It is well observed that a temporary discount on selling price provides significant increment in demand rate for seasonal products. Temporary price discount is an integral part of sales promotion scheme. In this paper we investigate in which time phase a temporary discount on selling price may be given to maximize the profit per unit time. Mathematical models are developed to find some important characteristics of discount starring time. Numerical examples are provided to illustrate the results of proposed models.

Coordinating production and shipment decisions in a two-stage supply chain with time-sensitive demand

This paper investigates a supply chain system consisting of one manufacturer who receives an order from a single retailer and then coordinates a production and shipment schedule to fulfill the retailer’s order as quickly and cost effectively as possible. It is assumed that the neither the manufacturer nor the retailer has inventory on hand at the time the retailer’s order is received by the manufacturer, and that the demand rate at the retailer is constant. It is also assumed that shortages at the retailer result in lost sales penalties. In this setting, lost sales penalties are incurred during the time in which the retailer has no inventory on hand, which illustrates the time-sensitive nature of the demand. We derive the manufacturer’s optimal production and shipping policy for the case in which the retailer controls the supply chain relationship, and also for the case in which the manufacturer controls the relationship.

Competition and Outsourcing with Scale Economies

Scale economies are commonplace in operations, yet because of analytical challenges, relatively little is known about how firms should compete in their presence. This paper presents a model of competition between two firms that face scale economies; (i.e., each firm's cost per unit of demand is decreasing in demand). A general framework is used, which incorporates competition between two service providers with price- and time-sensitive demand (a queuing game), and competition between two retailers with fixed-ordering costs and pricesensitive consumers (an Economic Order Quantity game). Reasonably general conditions are provided under which there exists at most one equilibrium, with both firms participating in the market. We demonstrate, in the context of the queuing game, that the lower cost firm in equilibrium may have a higher market share and a higher price, an enviable situation. We also allow each firm to outsource their production process to a supplier. Even if the supplier's technology is no better than the firms' technology and the supplier is required to establish dedicated capacity (so the supplier's scale can be no greater than either firm's scale), we show that the firms strictly prefer to outsource. We conclude that scale economies provide a strong motivation for outsourcing that has not previously been identified in the literature.