Coordinating a multi-echelon supply chain under production disruption and price-sensitive stochastic demand

Document Type

Article

Publication Date

1-1-2019

Abstract

This paper considers a three-echelon supply chain system with one raw-material supplier, one manufacturer and one retailer in which both the manufacturer and the raw-material supplier are exposed to the risk of production disruptions. The market demand is assumed to be uncertain but sensitive to the retail price. The objective is to determine the optimal lot sizes of the supplier and the manufacturer, and the selling price of the retailer when the wholesale prices of the upstream entities are prescribed and the retailer's order quantity is chosen before the actual demand is realized. As the benchmark case, the expected total profit of the centralized channel is maximized. The decentralized supply chain is coordinated under pairwise and spanning revenue sharing mechanisms. Numerical study shows that disruptions have remarkable impact on supply chain decisions.

Publication Source (Journal or Book title)

Journal of Industrial and Management Optimization

First Page

1631

Last Page

1651

This document is currently not available here.

Share

COinS