scholarly journals Decentralized Supply Chains under Random Price-Dependent Demand: Noncooperative Equilibria vs. Coordination with Cost-Sharing Contracts

2020 ◽  
Vol 2020 ◽  
pp. 1-15
Author(s):  
Yanpeng Sun ◽  
Cheng Ma ◽  
Qi Sun
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Retail Price ◽  
Lost Sales ◽  
Supply Chain System ◽  
Decentralized Supply Chain ◽  
Equilibrium Response ◽  
Buy Back ◽  
Dependent Demand

It is common for a supplier to sell products to multiple retailers. In this paper, we investigate the equilibrium behavior of a decentralized supply chain with multiple retailers facing a random price-dependent demand in the additive form. Here, we consider two kinds of demand functions: the distribution of the demand depends only on the retailer’s own retail price (noncompeting retailers) and not only on his own retail price but also on that of the other retailers (competing retailers). We present appropriate wholesale price, buy-back, and lost-sales cost-sharing contracts to coordinate the total supply chain, so that when all the retailers adopt their equilibrium response, the supply chain system coordination is also achieved. Furthermore, the coalition formation among retailers is also analyzed. We find that with buy-back and lost-sales cost-sharing contracts and linear price-dependent demand function, retailers always prefer being in the grand coalition to forming any other coalition.

Joint Decision for Price Competitive Inventory Model with Time-Price and Credit Period Dependent Demand

2017 ◽  
pp. 341-352
Author(s):  
Nita H. Shah
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Retail Price ◽  
The Other ◽  
Market Demand ◽  
Joint Decision ◽  
Credit Period ◽  
Time Price ◽  
Delay In Payments ◽  
Dependent Demand

The problem analyzes a supply chain comprised of two front-runner retailers and one supplier. The retailers' offer customers delay in payments to settle the accounts against the purchases which is received by the supplier. The market demand of the retailer depends on time, retail price and a credit period offered to the customers with that of the other retailer. The supplier gives items with same wholesale price and credit period to the retailers. The joint and independent decisions are analyzed and validated numerically.

Coordination of a Supply Chain with Satisficing Objectives Using Contracts

2007 ◽  
pp. 232-251 ◽  
Author(s):  
C. Shi ◽  
B. Chen
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Profit Maximization ◽  
Expected Profit ◽  
Business Success ◽  
Pareto Optimal ◽  
Performance Targets ◽  
Decentralized Supply Chain ◽  
Quantity Flexibility ◽  
Buy Back

Setting performance targets and managing to achieve them is fundamental to business success. As a result, it is common for managers to adopt a satisficing objective—that is, to maximize the probability of achieving some preset target profit level. This is especially true when companies are increasingly engaged in short-term relationships enabled by electronic commerce. In this chapter, our main focus is a decentralized supply chain consisting of a supplier and a retailer, both with the satisficing objective. The supply chain is examined under three types of commonly used contracts: wholesale price, buy back, and quantity flexibility contracts. Because a coordinating contract has to be Pareto optimal regardless of the bargaining powers among the agents, we first identify the Pareto-optimal contract(s) for each contractual form. Second, we identify the contractual forms that are capable of coordination of the supply chain with the satisficing objectives. In contrast to the well-known results for the supply chain with the objectives of expected profit maximization, we show that wholesale price contracts can coordinate the supply chain with the satisficing objectives, whereas buy back contracts cannot. Furthermore, quantity flexibility contracts have to degenerate into wholesale price contracts to coordinate the supply chain. This provides an important justification for the popularity of wholesale price contracts besides their simplicities and lower administration costs. Finally, we discuss possible extensions to the model by considering different types of objectives for different agents.

An Integrated Production-Supply System with Uncertain Demand, Nonlinear Lead Time and Allowable Shortages

2012 ◽  
Vol 3 (4) ◽  
pp. 1-18 ◽  
Author(s):  
Hengameh Tahmasebi ◽  
Junfang Yu ◽  
Bhaba R. Sarker
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Wholesale Price ◽  
Nonlinear Function ◽  
Profit Sharing ◽  
Supply System ◽  
Uncertain Demand ◽  
Lost Sales ◽  
Supply Chain System ◽  
Integrated Production

A supply chain consisting of a single-supplier and a single-buyer is modeled and compared in two different modes: non-coordinated and coordinated. The model is established based on the fact that the demand is uncertain and shortages are considered as lost sales. The buyer’s order lead time is a nonlinear function of the buyer’s order size and the number of shipments from the supplier. Quantity discount offers are used as a tool to achieve the coordination between both parties. In non-coordinated mode the total annual profits of both parties are maximized using partial derivative and a lower and an upper bound are obtained for the supplier’s wholesale price. For the coordinated mode total annual profit of the whole supply chain system is maximized using partial derivatives and coordination may increase the total annual profit of the whole system is mathematically proved. In order to encourage the both parties to coordinate, a fair profit-sharing method is proposed based on the total costs that each party incurs. The supplier’s wholesale price is evaluated such that coordination seems appealing and profitable for both parties.

scholarly journals Green Supply Chain Game Model and Contract Design: Risk Neutrality vs. Risk Aversion

2021 ◽  
Author(s):  
Jianhu Cai ◽  
Huazhen Lin ◽  
Xiaoqing Hu ◽  
Minyan Ping
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Risk Tolerance ◽  
Retail Price ◽  
Green Supply Chain ◽  
Risk Averse ◽  
Equilibrium Solutions ◽  
Risk Neutral

Abstract This paper incorporates the players’ risk attitudes into a green supply chain (GSC) consisting of a supplier and a retailer. The supplier conducts production and determines the green level and wholesale price as a game leader, the retailer sells green products to consumers and determines the retail price as a follower. Equilibrium solutions are derived, and the influence of risk aversion on the GSC is examined. Our results show that, for the centralized GSC, risk aversion lowers the green level and the retail price; while for the decentralized GSC, risk aversion lowers the wholesale price and the retail price, but it may induce the supplier to increase the green level given a large risk tolerance of the supplier. Meanwhile, the risk-averse decentralized GSC may obtain more expected profit than the risk-neutral decentralized GSC. Furthermore, this paper designs a revenue-and-cost-sharing joint contract to coordinate the risk-neutral GSC, and such a contract can improve the risk-averse GSC under specific conditions.

scholarly journals Decisions of Closed-Loop Supply Chain Based on Recycling Effort and Differential Game

2020 ◽  
Vol 2020 ◽  
pp. 1-19
Author(s):  
Jingxiu Song ◽  
Yuan Bian ◽  
Guangdong Liu
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Consumer Satisfaction ◽  
Closed Loop ◽  
Wholesale Price ◽  
Transfer Payment ◽  
Closed Loop Supply Chain ◽  
Profit Distribution ◽  
Decentralized Supply Chain ◽  
Recovery Effort

Recycled resource and consumer satisfaction drive bicycle enterprises to take effort to recycle damaged bicycles. Considering consumers’ riding experience, this paper analyzes a closed-loop supply chain where the operator sets price and recycling effort, and the supplier determines wholesale price. Rent and recycling strategies in integrated and decentralized channels are analyzed, and four types of revenue and cost-sharing contracts are compared, and the linear transfer payment-CS contract is designed to coordinate the decentralized supply chain. The results show that the consumers’ concern for riding experience can encourage the operator to increase recycling effort and the operator increases the rents and recycling effort over time. Besides, the sharing deposit income among supply chain members only affects the wholesale price and does not change the decisions of rent and recovery effort. In other words, the deposit is used to adjust the profit distribution among members, and there is no difference for consumers and society.

scholarly journals Optimal Decisions in a Single-Period Supply Chain with Price-Sensitive Random Demand under a Buy-Back Contract

2014 ◽  
Vol 2014 ◽  
pp. 1-11 ◽  
Author(s):  
Feng Wang ◽  
In-Chan Choi
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Retail Price ◽  
Optimal Decision ◽  
Order Quantity ◽  
Random Demand ◽  
Demand Distribution ◽  
Single Period ◽  
Pareto Equilibrium ◽  
Buy Back

This paper studies a single-period supply chain with a buy-back contract under a Stackelberg game model, in which the supplier (leader) decides on the wholesale price, and the retailer (follower) responds to determine the retail price and the order quantity. We analytically investigate the decentralized retailer’s optimal decision. Our results demonstrate that the retailer has a unique optimal simultaneous decision on the retail price and the order quantity, under a mild restriction on the demand distribution. Moreover, as it can be shown that the decentralized supply chain facing price-sensitive random demand cannot be coordinated with buy-back contract, we propose a scheme for the system to achieve Pareto-improvement. Theoretical analysis suggests that there exists a unique Pareto-equilibrium for the supply chain. In particular, when the Pareto-equilibrium is reached, the supply chain is coordinated. Numerical experiments confirm our results.

scholarly journals Novel Joint-Financing Model for Bilateral Capital Restricted Supply Chains under Cap-and-Trade Regulation

2018 ◽  
Vol 2018 ◽  
pp. 1-13
Author(s):  
Yanfang Huo ◽  
Xize Wang ◽  
Quan Deng ◽  
Peng Han
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Low Carbon ◽  
Cap And Trade ◽  
Supply Chain System ◽  
Loan Rate ◽  
The Government ◽  
Buy Back

This paper proposes a novel supply chain joint-financing pattern for SMEs with limited funds and financing difficulties. The proposed pattern was designed for green investment under cap-and-trade systems and to promote low-carbon economies characterized by bilateral capital restricted supply chains. The basic conditions for supply chain coordination of low-carbon buy-back contracts are derived through a basic model with no funding support. The joint-financing decisions model is analyzed according to the decision-making behavior of all parties and coordination among components of the supply chain system. The risk to which the bank is subjected under low-carbon transactions is also discussed. The proposed model not only reduces the carbon emissions of unit products, but also expands the scale of production. There are negative correlations between unit emissions reduction with the sharing coefficient of reduction costs, the loan rate, and the wholesale price. To minimize environmental effects while maximizing societal benefits, the government is recommended to ensure a reasonable trade-off between green-innovation subsidies and penalties.

scholarly journals The Model of Distributor Chain Financing Based on Buy Back Guarantee Contract

2014 ◽  
Vol 2014 ◽  
pp. 1-7 ◽  
Author(s):  
Jian-xin Chen ◽  
Jia-yin Chen
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
Wholesale Price ◽  
Supply Chain System ◽  
Chain System ◽  
The Core ◽  
Core Enterprise ◽  
Buy Back ◽  
Optimal Ordering ◽  
Ordering Quantity

This paper considers the strategy employed by a buy back guarantee contract with a capital-constrained distributor and a core enterprise. The distributor faces a nonnegative random demand, and the core enterprise applies buy back guarantee contract in order to interact with the capital-constrained distributor. Mathematical model is built to get the optimal ordering quantity of the distributor and the optimal wholesale price of the core enterprise. Then sensitivity analysis of optimal ordering quantity is obtained about the wholesale price, the initial funds, and the salvage of the product. On that basis, the comparison is made between two financing modes—trade credit contract and buy back guarantee contract. In the end, a numerical analysis is illustrated. The results show that the different financing modes bring the different expected profits to supply chain system with the different initial funds, finding that the financing modes, buy back guarantee contract discussed in the paper, can create more value for supply chain system than trade credit contract.

scholarly journals Pricing-Decision and Coordination Contract considering Product Design and Quality of Recovery Product in a Closed-Loop Supply Chain

2015 ◽  
Vol 2015 ◽  
pp. 1-14 ◽  
Author(s):  
Qingming Zou ◽  
Guangyu Ye
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Wholesale Price ◽  
Retail Price ◽  
Recycling Rate ◽  
Supply Chain System ◽  
Closed Loop Supply Chain ◽  
Chain System ◽  
Total Profit

In a closed-loop supply chain consisting of a manufacturer and a retailer, this paper studies the pricing strategies and coordination mechanism of supply chain when the remanufacturing cost is random caused by the proportion of reusability parts in design stage and quality condition of recycling product. The results show that the wholesale price and retail price are negative correlation, while the recycling rate and total profit of supply chain system are positive correlation with the proportion of reusability component designed in new product and quality of recycling product. Moreover, there are conclusions that the wholesale price and retail price are lower while the recycling rate and total profit of supply chain system are higher with centralized decision. Then, in order to coordinate the closed-loop supply chain, this paper develops a revenue-sharing contract, in which the revenue share parameter is determined based on absolute deviation approach. The theoretical results are illustrated by a numerical example.

scholarly journals Dynamic Adjustment Mechanism and Differential Game Model Construction of Mask Emergency Supply Chain Cooperation Based on COVID-19 Outbreak

2021 ◽  
Vol 13 (3) ◽  
pp. 1115
Author(s):  
Shufan Zhu ◽  
Kefan Xie ◽  
Ping Gui
Keyword(s):  
Supply Chain ◽  
Differential Game ◽  
Production Technology ◽  
Wholesale Price ◽  
Transfer Payment ◽  
Dynamic Adjustment ◽  
Supply Chain System ◽  
Government Subsidies ◽  
Technology Investment ◽  
The Impact

Incorporating the impact of the COVID-19 pandemic on the mask supply chain into our framework and taking mask output as a state variable, our study introduces the differential game to study the long-term dynamic cooperation of a two-echelon supply chain composed of the supplier and the manufacturer under government subsidies. The study elaborates that government subsidies can provide more effective incentives for supply chain members to cooperate in the production of masks compared with the situation of no government subsidies. A relatively low wholesale price can effectively increase the profits of supply chain members and the supply chain system. The joint contract of two-way cost-sharing contract and transfer payment contract can promote production technology investment efforts of the supply chain members, the optimum trajectory of mask production, and total profit to reach the best state as the centralized decision scenario within a certain range. Meanwhile, it is determined that the profits of supply chain members in the joint contract can be Pareto improvement compared with decentralized decision scenario. With the increase of production technology investment cost coefficients and output self-decay rate, mask outputs have shown a downward trend in the joint contract decision model. On the contrary, mask outputs would rise with growing sensitivity of mask output to production technology investment effort and increasing sensitivity of mask demand to mask output.

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