Two-level Supply Chain Research Articles

Cross-border supply chain coordination of low-carbon agricultural products under the risk of supply uncertainty.

The purpose of this paper is to discuss how cross-border e-commerce enterprises can promote the sustainable development of the supply chain by optimizing the risk of supply disruption and product quality control mechanism of the cross-border supply chain of low-carbon agricultural products in the face of the problem of uneven quality and inventory shortage that prevails in the supply chain of low-carbon agricultural products under the framework of low-carbon economy. Methods: A two-level supply chain model consisting of a risk-averse cross-border e-commerce enterprise and two risk-neutral overseas suppliers is constructed to compare the optimal strategies and their coordination effects under the centralized and decentralized decision-making modes, and to deeply analyze the supply chain's operation mechanism. Further, the quality cost factor is introduced and an option contract model is designed to quantitatively analyze the impact of different decision-making scenarios and parameter changes on the overall supply chain performance. The results of the study show that under the coordination of option contract, the profit of cross-border e-commerce companies tends to decrease as the risk of supply disruption increases, while the profit of suppliers rises accordingly. Meanwhile, improving the quality of agricultural products can significantly improve the overall profitability of the supply chain. The cost-sharing mechanism is positively related to the profit of cross-border e-commerce companies, but negatively affects the profit of suppliers. In addition, the adjustment of the option price is directly associated with the increase of the specific supplier's profit and the decrease of the cross-border e-commerce enterprise's profit. Conclusion: By constructing and analyzing the option contract model considering the risk of supply disruption, this study effectively reveals the key influencing factors and their interactions in the cross-border supply chain of low-carbon agricultural products, and provides cross-border e-commerce enterprises with specific strategies to achieve coordination of the supply chain contract, improve product quality, and mitigate the risk of supply disruption, and then promote the sustainable development of the supply chain of low-carbon agricultural products.

Service provision decisions of competitive manufacturers: From service spillover perspective

This paper investigates competing manufacturers’ strategic choice of service provision in a two-level supply chain composed two manufacturers and one common retailer. Our results indicate that the strategy that two competing manufacturers provide services is always the dominant choice, and two competing manufacturers could have the highest profit in that case. But when only one of them provides services, the result is related to the potential market size, the unit service cost coefficient and the service spillover intensity. Finally, through the cost sharing and quantity competition extensions, we find the Pareto regions of cost sharing under the equilibrium strategy, and there will be multiple Nash equilibrium regions under the quantity competition.

Decision on the introduction of blockchain technology in green supply chains considering altruistic preferences

Purpose This paper aims to examine the blockchain introduction and altruistic preference decisions of the supplier in agricultural food supply chains and discuss how the supplier decisions are influenced by blockchain technology and altruistic preference levels. Design/methodology/approach The author considers a single period two-level supply chain model to describe the supplier’s decisions. The supplier, as the leader of the game, decides whether to introduce blockchain technology and his own level of altruistic preferences. Consumers have environmental awareness and heterogeneity in green trust. Supply chain members determine their own product pricing and green effort level under Stackelberg game. Findings The results reveal the negative impact of unit verification cost in the technology introduction process on the supply chain. In addition, the supplier can adjust their profits by adjusting their altruistic preferences after introducing blockchain to offset the impact of blockchain through the influence of altruistic preferences as discussed by the author. Originality/value This paper investigates how the profits and green efforts of supply chain members are influenced by blockchain technology and altruistic preferences.

Neural network for solving disturbance optimal control model for production inventory system with stochastic deterioration in two-level supply chain

Neural network for solving disturbance optimal control model for production inventory system with stochastic deterioration in two-level supply chain

Coping with drug shortages: A study of government-enterprise option cooperation stockpiling strategies for drugs in shortage considering API surrogate stockpiling subsidies.

Drug shortage is a global problem, and the development of government-enterprise cooperative stockpiles of drugs in shortage, combining physical and production capacity, has become one of the most important means of coping with drug shortages. However, existing studies have tended to overlook the fact that shortages of Active Pharmaceutical Ingredients (APIs) have become an important constraint on production capacity stockpiling and that the lack of incentives and provisions for coordination of benefits have led to a double marginal effect of joint stockpiling by government and enterprises of drugs in shortage. Accordingly, this study introduced the option contract to the drug supply system composed of government and pharmaceutical enterprises and used the subsidy of API storage in lieu as an important initiative to incentivize the reserve of APIs, to construct a model of shortage drug reserve under the government's leadership. This study aims to improve the effect of government-enterprise joint stockpiling of drugs in shortage, which is of great theoretical and practical significance. According to the classification of production license types of pharmaceutical enterprises, this study established a three-level supply chain decentralized decision-making model consisting of the government, formulation enterprises, and API enterprises, and a two-level supply chain centralized decision-making model consisting of the government and API Formulation (API-F) integrated enterprises, respectively. By solving the inverse order derivation, the government-enterprise option cooperation conditions and optimal decision-making strategy were derived. The study results showed that: (i) The addition of enterprise API stockpiling mode can help the government conventional reserves, and enterprise production capacity reserves, broaden the way of drug reserves, and improve the effect of government-enterprise option cooperation; (ii) when the probability of drug shortages is high, the government should prefer the cooperation of API-F integrated enterprises, which is conducive to reducing intermediate links and government costs and improving the supply responsiveness to shortages of medicines; (iii) Setting appropriate government subsidies for API storage can incentivize enterprises to stockpile APIs and improve drug production capacity and physical supply response capability. This study took the problem of socialized stockpiling of drugs in shortage as an entry point and explored the problems and solution strategies in the government-enterprise cooperative stockpiling of drugs in shortage, which not only made some theoretical contributions to the application of options contract in the government-enterprise cooperative stockpiling of drugs in shortage but also provided new ideas and theoretical basis for the improvement of the stockpiling work of drugs in shortage.

A Sustainable Supply Chain Model with Low Carbon Emissions for Deteriorating Imperfect-Quality Items under Learning Fuzzy Theory

In this paper, we develop a two-level supply chain model with low carbon emissions for defective deteriorating items under learning in fuzzy environment by using the double inspection process. Carbon emissions are a major issue for the environment and human life when they come from many sources like different kinds of factories, firms, and industries. The burning of diesel and petrol during the supply of items through transportation is also responsible for carbon emissions. When any company, firm, or industry supplies their items through a supply chain by using of transportation in the regular mode, then a lot of carbon units are emitted from the burning of petrol and diesel, etc., which affects the supply chain. Carbon emissions can be controlled by using different kinds of policies issued by the government of a country, and lots of companies have implemented these policies to control carbon emissions. When a seller delivers a demanded lot size to the buyer, as per demand, and the lot size has some defective items, as per consideration, the demand rate is uncertain in nature. The buyer inspects the received whole lot and divides it into two categories of defective and no defective deteriorating items, as well as immediately selling at different price. The fuzzy concept nullifies the uncertain nature of the demand rate. This paper covers two models, assuming two conditions of quality screening under learning in fuzzy environment: (i) the buyer shows the quality screening and (ii) the quality inspection becomes the seller’s responsibility. The carbon footprint from the transporting and warehousing the deteriorating items is also assumed. The aim of this study is to minimize the whole inventory cost for supply chains with respect to lot size and the number of orders per production cycle. Jointly optimizing the delivery lot size and number of orders per production cycle will minimize the whole fuzzy inventory cost for the supply chain and also reduce the carbon emissions. We take two numerical approaches with authentic data (from the literature reviews) for the justification of the proposed model 1 and model 2. Sensitivity observations, managerial insights, applications of these proposed models, and future scope are also included in this paper, which is more beneficial for firms, the industrial sector, and especially for online markets. The impact of the most effective parameters, like learning effect, fuzzy parameter, carbon emissions parameter, and inventory cost are shown in this study and had a positive effect on the total inventory cost for the supply chain.

A Literature Review on Pricing Decisions for Complementary Supply Chains Considering Social Preference Behavior

In practice, many enterprises have achieved better market results through the implementation and continuous optimization of the complementary products strategy. Although complementary products can bring higher value and utility to customers' consumption experience, thus affecting the production operation and sales price decisions of enterprises, the strategic choices of complementary supply chain members will be affected when facing the different social preference behaviors of the members in the complementary supply chain and the complex supply chain structure. Based on this, this paper considers the vertical altruistic preference of the manufacturer over the retailer and the horizontal altruistic preference of the manufacturer over the manufacturer of the complementary product under different altruistic preference dimensions for a two-level supply chain system consisting of two manufacturers producing complementary products and a common retailer, and analyzes the optimal pricing strategies of supply chain members under different altruistic preference levels, which is of great significance for the stable operation of the supply chain.

A Two-Objective Model for the Multilevel Supply Chain of Blood Products with the Approach of Reducing the Rate of Contagion under the (COVID-19) Epidemic Outbreak Conditions

The conditions of the coronavirus epidemic have put much pressure on the healthcare system. This disease has hurt the blood supply through the reduction of blood donation and the reduction of access to suitable collection facilities due to dysfunction. Considering the importance of the subject, the purpose of this paper is to design a two-level supply chain network for blood products with the approach of reducing costs and the rate of contagion under the conditions of epidemic outbreaks (COVID-19). After examining the solution methods for multilevel supply chain networks of blood products under the conditions of the spread of the COVID-19 virus, three exact solution methods, including LP-metric, an improved version of the augmented ε-constraint (AUGMECON2), and an improved weighted Chebyshev, are proposed. They are used to solve the model in small dimensions. In order to compare the methods in the obtained solutions, several numerical examples of different sizes are generated and solved. Then, using the statistical assumption test, the obtained results are compared in all numerical examples by Tukey’s technique. Also, the TOPSIS is applied to select the best method. Finally, in order to investigate the reaction of the objectives to the changes in the contagion probability parameter, a sensitivity analysis has been performed. The results emphasize that improving the performance of the blood supply chain (BSC) can lead to a reduction in BSC costs and improved service to patients. Also, the adaptation of different components of the BSC and regular coordination between them play an efficient role in controlling and improving this disease and reducing the costs of the BSC. Also, receiving the plasma product of recovered people from type (II) donors can play a vital role in reducing the percentage of disease transmission.

Structural rearrangement of the network system from an efficiency perspective: A silver lining of profit improvement

Previous studies on profit improvement mainly consider improving traditional profit efficiency including the technical, allocative, and price profit efficiencies. Few studies discuss profit improvement by optimizing the structural arrangement of the network system, which is about adjusting the combinations of upstream and downstream entities in the system. When achieving traditional efficiency, the system's profit can no longer be increased only by reducing inputs, increasing outputs, and adjusting prices. In this situation, structural rearrangement may provide a silver lining to profit improvement. In this study, we take the two-level supply chains as an example and address the research question of how to improve profit via structural rearrangement of the system containing several two-stage subsystems from the efficiency perspective. To answer this question, we view two-stage subsystems in each system as players and propose a data envelopment analysis permutation game method. Through this method, we find the optimal structural rearrangement plan, which is a new way to further improve the profit in addition to improving traditional profit efficiency. We propose a new efficiency measurement, the structural profit efficiency, and find overall profit efficiency is the product of structural profit efficiency and traditional profit efficiency. Finally, we conduct an experiment using the data of 27 supply chains to validate our proposed method and provide the optimal structural rearrangement plans for them.

Presenting a two-echelon multi-objective supply chain model considering the expiration date of products and solving it by applying MODM

The supply chain (SC) as the most significant factor influencing competitive advantage has a great impact on the organization's life and progress. Considering the expiration date of products in supply chain modeling is essential for ensuring operational efficiency, reducing waste, maintaining product quality, and ultimately driving business success. Therefore, this paper provides a two-level supply chain including manufacturer and distributor then chain modeling with considered conditions and applying the concept of Markowitz's theory. Finally, drawing the optimal cost curve of producer and distributor as an efficient frontier. For this purpose, the main contribution of the paper is determining the optimal cost of each level of the chain if the cost of another level is known and increasing the power of analysis. The proposed model applied in Darupakhsh Manufacturing Company and Mahya Daroo Distribution Company, a two-echelon supply chain design, including a manufacturer and a distributor is developed. At first, this chain is modeled, and then, implementing the concept of Markowitz theory, the optimal cost curve of producer and distributor is drawn as an efficient frontier. Findings show it is found that the optimal cost of the two echelons of the chain is inversely correlated and decreases with the increase of another one. Furthermore, it is found that the producer warehouse limit is redundant and has no effect on the final response. Also, with the increase in the cost of the manufacturer, the number of deliveries decreases, and instead, the number of products in each delivery increases, which results in a reduction in the costs of the distributor.

Information sharing format preferences under different supply chain power structures

Purpose This paper aims to study the preferences of the supply chain (SC) members on various power structures under demand information asymmetry considering competing retailers. Design/methodology/approach A two-level SC with one manufacturer and two retailers is designed. The retailers are in Bertrand competition. The manufacturer who holds the confidential demand information chooses the appropriate information sharing (IS) format. Three IS formats are provided, i.e. no IS (the manufacturer never shares with the retailers), partial IS (the manufacturer shares with one retailer), full IS (the manufacturer shares with all retailers). In addition, the authors model two power structures based on the decision sequences in the SC, i.e. retailers or manufacturer-dominant SC. The authors characterize the equilibrium solutions and payoffs and then investigate the members’ preferences for IS formats. Findings It is shown that in retailers (manufacturer)-dominant SC, the retailers prefer full (no) IS, but the manufacturer prefers no (full) IS. Moreover, the authors analyze the members’ preferences on power structures under demand information asymmetry, which has a relationship with the degrees of demand uncertainty and competition intensity. Originality/value The analysis regarding the preferences of the SC members on power structure under demand information asymmetry provides valuable managerial insights to enhance cooperation and achieve a win-win result.

Retracted: Simulation Research on Information-Sharing Value of Two-Level Supply Chain

Retracted: Simulation Research on Information-Sharing Value of Two-Level Supply Chain

The Complete Squares Method and the Arithmetic-Geometric Mean Inequality to Solve and Analyze A Two-Level Supply Chain Problem

Bu çalışmada, farklı ülkelerde bulunan tek bir üretici ve tek bir perakendeciden oluşan iki aşamalı tedarik zinciri problemi için bir bütünleşik stok kontrol modeli geliştirilmiştir. Bu çalışmanın amacı, bütünleşik toplam maliyeti minimum yapacak şekilde üreticinin parti sayısının ve perakendecinin parti büyüklüğünün, yani bütünleşik üretim-stok kontrol politikası parametrelerinin birlikte hesaplanmasıdır. Tek kalem ürünün siparişi, eşit büyüklükte partiler halinde teslim alınmaktadır. Perakendecinin teslim aldığı her parti iyi kaliteli ürünlerle birlikte kusurlu ürünler de içermektedir. Kusurlu ürünler, kalite kontrol işleminin ardından indirimli fiyattan satılmak üzere tek parti halinde stoktan çıkarılmaktadır; kusurlu ürün sayısı kadar iyi kaliteli fakat daha yüksek fiyatlı ürünler yerel bir tedarikçiden satın alınmaktadır. Üretici ve perakendecinin toplam stok maliyeti fonksiyonları elde edilmiş ve bütünleşik toplam stok maliyeti fonksiyonu türetilmiştir. Optimum çözüm diferensiyel hesabı kullanmadan aritmetik-geometrik ortalama eşitsizliği ve kareye tamamlama yöntemiyle elde edilmiştir. Sayısal bir örnek yardımıyla teorik sonuçlar elde edilmiş ve duyarlılık analizleri verilmiştir.

Is blockchain technology desirable? When considering power structures and consumer preference for blockchain

Blockchain technology is very useful for combating counterfeits and verifying the authenticity of products for consumers. This paper studies blockchain adoption in a two-level supply chain consisting of a brand supplier and a retailer. Our contribution using the game-theoretic framework is to consider the various preferences that consumers may have for blockchain-supported products and to investigate the value and effects of blockchain in a traditional wholesale channel with different power structures and a platform-based-agent selling channel. We confirm that consumer aversion to blockchain will lower retailer incentive to adopt blockchain, while the opposite will occur if consumers are interested in blockchain. We find that the market leader with power advantage is more motivated to adopt blockchain while the follower has less motivation. We also find that the brand supplier will be willing to move to the agent selling channel if the unit cost of the blockchain is low and the platform commission rate is medium. Moreover, an interesting finding is that blockchain can achieve a win–win-win outcome for the brand supplier, retailer, and consumers under a certain critical threshold, which may cause unfair distribution of supply chain profit and may also be detrimental to the establishment of agent selling.

Analysis of Emission Reduction Mechanism of High-Tiered Carbon Tax under Green and Low Carbon Behavior

This article studies the emission reduction mechanism of high-tiered carbon taxes under green and low-carbon behavior in single and two-stage supply chains. First, based on the Cournot game model, it explores the impact of high-tiered carbon tax policies on supply chain carbon reduction decisions in the green exchange market. By analyzing the effects of implementing a high-tiered carbon tax policy, the basic characteristics of its implementation are identified, and the advantages of a high-tiered carbon tax compared to a unified carbon tax are summarized. Second, it establishes a carbon reduction technology investment cost-sharing model and a carbon tax cost-sharing model under the high-tiered carbon tax policy. It analyzes and studies the impact of high-tiered carbon tax policies on balancing the relationship between members of the two-level supply chain through optimal decision-making of the two-level supply chain under two cost-sharing strategies, revealing the emission reduction mechanism of the two-level supply chain under high-tiered carbon tax policies. The results indicate that there are extreme points in the emission reduction rates of producers in the green exchange market under both the high-tiered carbon tax policy and the unified carbon tax policy. It shows that the two cost-sharing strategies can effectively alleviate the cost burden for producers, increase their marginal profits, and promote further improvement in emission reduction. It explores the emission reduction mechanism of high-tiered carbon taxes and future research should delve into the emission reduction mechanism of high-tiered carbon taxes in different carbon emission departments and regions.

Research on Supply Chain Pricing Strategies under Carbon Emission Quota Constraints

In order to reduce the carbon emissions of manufacturers and retailers in their business activities, carbon emission limits must be set for manufacturers and retailers respectively, and they must make favorable decisions within the limits. This paper will focus on a two-level supply chain system composed of a single manufacturer and a single retailer, and explore the optimal wholesale price, optimal retail price, and optimal profit under four scenarios: neither is constrained by carbon quotas, only the manufacturer is constrained by carbon quotas, only the retailer is constrained by carbon quotas, and both are constrained by carbon quotas, by constructing Lagrange functions. Comparative analysis will be conducted. Research has shown that only when manufacturers are subject to carbon quotas, the optimal wholesale and retail prices will rise, and the optimal profits of both manufacturers and retailers will decrease; When retailers are constrained by carbon quotas, whether manufacturers are constrained by carbon quotas does not affect the optimal price and profit; When both are subject to carbon emission restrictions and retailers increase their carbon emission quotas, manufacturers will lower wholesale prices and retailers will lower retail prices.

Research on Supply Chain Emission Reduction Decisions Considering Loss Aversion under the Influence of a Lag Effect

Considering that a lag effect exists in R&D investment, investigating the impacts of manufacturers’ resulting loss-averse behavior on R&D investment in carbon emission reduction technologies is important. This paper establishes three differential game models, namely centralized decision making, decentralized decision making with the manufacturers’ rational preferences, and decentralized decision making with the manufacturers’ loss-aversion preferences. The models are used to analyze the mechanism of the lag effect and loss aversion on manufacturers’ R&D investment in emission reduction, based on a two-level supply chain consisting of manufacturers and retailers. This study finds that: (1) The lag effect can encourage manufacturers to invest in the R&D of emission reduction technologies. (2) There is a threshold value for the lag time, and only when the lag time is higher than this threshold value will manufacturers display loss-averse behavior. (3) When manufacturers’ degree of loss aversion is small, loss-averse behavior has a negative effect on their investment in the R&D of emission reduction technologies, while the opposite has a positive effect.

Implications of information sharing on blockchain adoption in reducing carbon emissions: A mean–variance analysis

Considering market uncertainties and risks, this study examines the implications of demand information sharing (DIS) on blockchain adoption (BA) in reducing carbon emissions, and further analyzes the impacts of DIS and BA on the welfare of consumers and the whole society. In this paper, we first develop analytical models based on the mean–variance theory to investigate a two-level supply chain’s optimal decisions in four scenarios (i.e., without and with DIS and BA). Furthermore, we examine the impacts of supply chain members’ DIS and BA decisions and risk attitude on consumer surplus and social welfare. Lastly, we extend our models to explore a general scenario, i.e., we consider the presence of imperfect information sharing, privacy-conscious consumers, consumer carbon sensitivity differences, carbon cap-and-trade regulations, and inflexible blockchain deployments. We find that retailers should consider more crucial factors (e.g., demand uncertainties and the risk sensitivity of supply chain members) rather than simply focus on the type (i.e., high- or low-type) of demand before sharing demand information. Moreover, DIS and BA practices can not only improve the business performance of supply chain members but also contribute to the circular economy and sustainability. Then, DIS practices can minimize the manufacturers’ misjudgments about the timing of BA. Finally, the welfare of consumers and the whole society can be improved by sharing demand information and using blockchain technology.

Modeling the Stackelberg game with a boundedly rational follower in deterioration supply chain-based interaction with the leader’s hybrid pricing strategy

In the conventional Stackelberg game, all players are perfect optimizers, able to choose the best responses to their competitors' decisions. In contrast, in the Stackelberg game with bounded rationality, players are unable to optimize their individual payoffs and face strategic uncertainty due to the performance of competitors. In real games, players are usually unaware of the performance of their competitors. Therefore, to survive in the competitive market, they are forced to make decisions under conditions of bounded rationality. Due to the importance of decision-making in this situation, in this study, the Stackelberg game of deteriorating inventory within a two-level supply chain was developed considering the concept of bounded rationality. The follower in the Stackelberg game (manufacturer) is poorly aware of the leader's performance in terms of order size. Therefore, she/he manufactures the products at rates with normal distribution. For the first time, an algorithm based on Bayesian conjugate pair was proposed to solve the Stackelberg game with bounded rationality for deteriorating products. In addition, a comparison was made between the above conditions and a mode in which the leader's strategy is fully observable to the follower. The approach used in the proposed algorithm to adjust the production rate was also compared with the adjustment based on the partial adjustment model, and the obtained results prove the convergence of the proposed algorithm.

Profit Coordination and Optimization of Agricultural Product Brand Promotion Lead by Farmer Cooperative Organizations

In the e-commerce supply chain of agricultural products, there are three parties: farmer cooperative organizations, e-commerce platforms, and consumers. This study aims to investigate how to coordinate farmer cooperative organizations and e-commerce platforms to maximize the overall profits of the supply chains of agricultural products. Based on the Stackelberg game theory, this paper constructs a two-level supply chain decision-making model led by farmers’ cooperatives and followed by e-commerce platforms. It discusses two supply chain decision-making models (decentralized and centralized) with decision variables (selling price and promotion effort). The results show that the overall profit of the supply chain under centralized decision making is higher than the overall profit under decentralized decision making. In order to achieve the coordination of agricultural product sales price and brand promotion efforts and achieve win-win cooperation, this paper puts forward two coordination schemes: (1) coordinating revenue sharing, cost sharing, and wholesale price discounts and (2) coordinating the wholesale price. These two contract coordination schemes are verified by example analysis. Finally, the following strategies are recommended, including strengthening the investment in brand promotion and contract management.