A vendor managed inventory on consignment with penalty as a supply chain coordination arrangement

2019 ◽  
Vol 53 (4) ◽  
pp. 1343-1355 ◽  
Author(s):  
Ata Allah Taleizadeh ◽  
Shayan Tavakoli ◽  
Ioannis Konstantaras ◽  
Masoud Rabbani
Keyword(s):  
Sensitivity Analysis ◽  
Supply Chain ◽  
Control System ◽  
Supply Chain Coordination ◽  
Batch Size ◽  
Vendor Managed Inventory ◽  
Numerical Examples ◽  
Upper Limit ◽  
Single Vendor ◽  
Optimal Batch Size

This paper presents a mathematical two echelon vendor-managed inventory (VMI) model on consignment scheme in supply chain, in which the vendor pays a penalty for every extra unit which exceeds a specific upper limit to the buyer. In this arrangement the vendor can decide about the batch size he wants to transship to the buyer. Two cases are discussed in this paper; single vendor-single buyer and single vendor-two buyers. In this study after a review of coordination in supply chain and VMI on consignment, we discuss vendor-managed inventory scheme in comparison with traditional inventory control system. The optimal batch size is calculated and the paper investigates how a VMI on consignment arrangement with penalty can coordinate the supply chain. Numerical examples and sensitivity analysis is presented to illustrate the performance of model and the results.

scholarly journals Supply Chain Coordination Contracts under Double Sided Disruptions Simultaneously

2015 ◽  
Vol 2015 ◽  
pp. 1-9 ◽  
Author(s):  
Huan Zhang ◽  
Yang Liu ◽  
Jingsi Huang
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
Optimal Price ◽  
Supply Chain System ◽  
Pricing Policy ◽  
Product Cost ◽  
Numerical Examples ◽  
Supply Chain Contracts ◽  
Different Types ◽  
Key Factor

Supply chain coordination models are developed in a two-echelon supply chain with double sided disruptions. In a supply chain system, the supplier may suffer from the product cost disruption and the retailer suffers from the demand disruption simultaneously. The purpose of this study is to design proper supply chain contracts, under which the supply chain with double sided disruption can be coordinated. Firstly, the centralized decision-making models are applied to find the optimal price and quantity under three cases as the baseline. The different cases are divided by the different relationship between the product cost disruption and the demand disruption. Secondly, two different types of contracts are introduced to coordinate the whole supply chain. One is all-unit wholesale quantity discount policy (AQDP) contract, and the other one is capacitated linear pricing policy (CLPP) contract. And it is found out that the gap between the demand disruption and the product cost disruption is the key factor to influence the supply chain coordination. Some numerical examples and sensitivity analysis are given to illustrate the models. The AQDP contracts are listed out under different cases to show how to use it under double sided disruptions.

scholarly journals Supply Chain Coordination under Stock- and Price-Dependent Selling Rates under Declining Market

2012 ◽  
Vol 2012 ◽  
pp. 1-14 ◽  
Author(s):  
Subrata Saha ◽  
Sambhu Das ◽  
Manjusri Basu
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
Revenue Sharing ◽  
Stackelberg Games ◽  
Numerical Examples ◽  
Revenue Sharing Contract ◽  
Demand Rate ◽  
Time Price

We explore coordination issues of a two-echelon supply chain, consisting of a distributor and a retailer. The effect of revenue-sharing contract mechanism is examined under stock-time-price-sensitive demand rate. First, we investigate relationships between distributor and retailer under noncooperative distributor-Stackelberg games. Then we establish analytically that revenue sharing contact is able to coordinate the system and leads to the win-win outcomes. Finally, numerical examples are presented to compare results between the different models.

scholarly journals A consignment stock policy for a two-level supply chain with imperfect quality items

2021 ◽  
Author(s):  
Ehab A. Bazan
Keyword(s):  
Supply Chain ◽  
Production Process ◽  
Supply Chain Coordination ◽  
Secondary Market ◽  
Batch Size ◽  
Imperfect Production ◽  
Managerial Decisions ◽  
Imperfect Items ◽  
Imperfect Production Process ◽  
Stock Policy

A consignment stock is a type of supply-chain coordination for the management of supply-chains in which there is a joint vendor and buyer policy that is mainly focused on having the vendor manage the buyer's inventory. This thesis aims to investigate the consignment stock strategy in a single-vendor single-buyer supply-chain context considering imperfect items that may be produced from an imperfect production process. It develops a flexible mathematical model that allows for managerial decisions with regards to imperfect items and seeks to minimize costs (maximize profits) of the supply-chain. Such managerial decisions include scrapping items at a cost, selling them for a marginal profit to a secondary market, applying re-work, and/or applying minor setups to restore the production process. Results show that the introduction of imperfect items increases the batch size and reduces the number of shipments. Minor setups were shown to reduce cost, increase the number of shipments and reduce its size.

Two-Echelon Supply Chain Coordination with Vendor Managed Inventory

2009 ◽  
Vol 16-19 ◽  
pp. 1048-1052
Author(s):  
Jin Yu Ren ◽  
Yong Xian Liu ◽  
Yong Ping Hao
Keyword(s):  
Supply Chain ◽  
Competitive Advantage ◽  
Simulation Analysis ◽  
Supply Chain Coordination ◽  
Profit Sharing ◽  
Coordination Mechanism ◽  
Vendor Managed Inventory ◽  
Overall Performance

Coordination between buyer and supplier is an important way to lower supply chain cost and gain competitive advantage. This paper focuses on buyer-vendor coordination models within a vendor managed inventory setting, and sets up the coordination mechanism that allows supply chain to achieve the optimal overall performance and both parties in the supply chain to achieve profit sharing. Finally, simulation analysis is given.

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