Coordinate the Express Delivery Supply Chain with Option Contracts

2016 ◽  
Vol 9 (4) ◽  
pp. 1-21 ◽  
Author(s):  
Mengying Zhang ◽  
Jin Qin
Keyword(s):  
Supply Chain ◽  
Third Party ◽  
Third Party Logistics ◽  
Online Retailer ◽  
Option Contracts ◽  
Optimal Capacity ◽  
Service Supply Chain ◽  
Feasible Option ◽  
Capacity Decision ◽  
Express Delivery

In this paper, the authors study the capacity decision problem in an express delivery supply chain consisting of an online retailer and an express delivery provider where products sold by the online retailer are delivered by the express delivery provider to end customers. Unlike the case of the traditional manufacturer-retailer channels, the delivery capacity is a kind of “service product” that cannot be inventoried. To avoid the risk of unprofitable capacity, the delivery provider tends to build a limited delivery capacity which is smaller than the system-wide optimal capacity. To solve such a problem, the authors investigate the capacity coordination issue in this service supply chain using option contracts. By allowing the online retailer to reserve the capacity in advance, the delivery provider could rent a part of capacity which surpasses its self-owned capacity from a third party logistics. It is demonstrated that, compared with the benchmark based on a newsvendor model, option contracts can coordinate the delivery service supply chain. The authors also figure out the feasible option contracts that improve member's expected profit and show the degree of improvement that could be achieved.

Coordinate the Express Delivery Supply Chain with Option Contracts

2020 ◽  
pp. 1329-1352
Author(s):  
Mengying Zhang ◽  
Jin Qin
Keyword(s):  
Supply Chain ◽  
Third Party ◽  
Third Party Logistics ◽  
Online Retailer ◽  
Option Contracts ◽  
Optimal Capacity ◽  
Service Supply Chain ◽  
Feasible Option ◽  
Capacity Decision ◽  
Express Delivery

In this paper, the authors study the capacity decision problem in an express delivery supply chain consisting of an online retailer and an express delivery provider where products sold by the online retailer are delivered by the express delivery provider to end customers. Unlike the case of the traditional manufacturer-retailer channels, the delivery capacity is a kind of “service product” that cannot be inventoried. To avoid the risk of unprofitable capacity, the delivery provider tends to build a limited delivery capacity which is smaller than the system-wide optimal capacity. To solve such a problem, the authors investigate the capacity coordination issue in this service supply chain using option contracts. By allowing the online retailer to reserve the capacity in advance, the delivery provider could rent a part of capacity which surpasses its self-owned capacity from a third party logistics. It is demonstrated that, compared with the benchmark based on a newsvendor model, option contracts can coordinate the delivery service supply chain. The authors also figure out the feasible option contracts that improve member's expected profit and show the degree of improvement that could be achieved.

scholarly journals Coordinating a Service Supply Chain under Arms Offset Program’s Intervention by Performance-Based Contracting

2016 ◽  
Vol 2016 ◽  
pp. 1-10 ◽  
Author(s):  
Yi-Kuei Lin ◽  
Jong-Jang Lin ◽  
Ruey-Huei Yeh
Keyword(s):  
Supply Chain ◽  
Numerical Study ◽  
Support Service ◽  
Third Party ◽  
Third Party Logistics ◽  
Agent Model ◽  
Service Supply Chain ◽  
Maximum Profit ◽  
Game Theoretical Approach ◽  
Principal Agent Model

This paper investigates a support service supply chain for coordinating with a local third-party logistics provider by arms offset program’s intervention and develops a performance-based contracting framework for the coordinating problem, which remains scarce in the literatures. The performance-based contracting framework evaluates payments and profits for the support service by a game-theoretical approach with principal-agent model. We prove that the proposed framework is an effective tool in acquiring the balance between maximum profit and minimum payment for both parties in the coordinating problem without moral hazard issue. A numerical study consolidates the formulated schemes as contracting preference for both parties’ decision with a higher profit margin at a lower customer’s payment.

Overview on 3PL Selection Problem

2013 ◽  
pp. 266-279
Author(s):  
Aicha Aguezzoul
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Third Party ◽  
Selection Problem ◽  
Third Party Logistics ◽  
Literature Analysis ◽  
Chain Management

Many companies outsource their logistics functions to Third-Party Logistics providers (3PL) instead of achieving them internally. The studies on this field are mostly of empirical type and focused on reasons, benefits, and risks of working with 3PL as well as the role of those on supply chain management. This chapter focuses on 3PL selection problem and presents a literature analysis of 47 articles published within 2001-2011 period. The objective is to identify the mainly approaches applied and their evaluating criteria in measuring the performance of 3PL.

Operational Risk Management in Third Party Logistics (3PL)

2016 ◽  
pp. 218-239 ◽  
Author(s):  
Diego Fernando Manotas-Duque ◽  
Juan Carlos Osorio-Gómez ◽  
Leonardo Rivera
Keyword(s):  
Risk Management ◽  
Supply Chain ◽  
Strategic Alliances ◽  
Operational Risk ◽  
Third Party ◽  
Third Party Logistics ◽  
Supply Chain Risk Management ◽  
Supply Chain Risk ◽  
Risk Sources ◽  
Reducing Costs

Supply chain risk management processes are among the most important activities in the value chain of any industry. The supply chain risk management process includes different activities, focused on the identification, measurement, assessment, and mitigation of the main risk sources that can affect a supply chain. The increasing complexity facing global supply chains generates the need for suppliers to collaborate in different processes in a supply chain. In this context, Third Party Logistics Providers (3PL) have been widely promoted by the phenomenon of outsourcing, on which companies increasingly rely. The growth in logistics outsourcing is mainly attributed to the benefits it brings in terms of reducing costs, improving performance, allowing companies to focus on their core businesses and building virtual enterprises through strategic alliances. In this chapter we develop a model to identify the operational risk factors of a 3PL provider.

Leveraging Supply Chain Management in the Digital Economy

2009 ◽  
pp. 526-531
Author(s):  
Mahesh S. Raisinghani
Keyword(s):  
Supply Chain ◽  
Information Systems ◽  
Supply Chain Management ◽  
Raw Materials ◽  
Third Party ◽  
Third Party Logistics ◽  
End User ◽  
Chain Management ◽  
Critical Part ◽  
Functional Areas

A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. In other words, supply chain encompasses all of the activities associated with moving goods from raw-materials stage through to the end user. The information systems needed to monitor all of these activities are a critical part of the mix. Successful supply chain management (SCM), then, coordinates and integrates all of these activities into a seamless process. It embraces and links all of the partners in the chain. In addition to the key functional areas within the organization, these partners include vendors, carriers, third-party logistics companies, and information systems providers.

Managing Collaborative Relationships in Third Party Logistics

2020 ◽  
pp. 1783-1809
Author(s):  
Vicky Ching Gu ◽  
Ray Qing Cao ◽  
Ken Black ◽  
Hansen Zeng
Keyword(s):  
Supply Chain ◽  
Relationship Quality ◽  
Social Exchange ◽  
Social Exchange Theory ◽  
Positive Impact ◽  
Mediating Effect ◽  
Third Party ◽  
Supply Chain Performance ◽  
Third Party Logistics ◽  
Collaborative Activities

Some supply chain management researchers have realized the potential of collaborative activities for enhancing supply chain performance while other researchers have explored the positive impact of relationship quality on supply chain performance. To date, however, no empirical research has integrated these two research streams. Drawing upon social exchange theory, the authors propose a holistic research framework to explore the relationships among collaborative activities, the inter-organizational relationship quality, and supply chain performance. Specifically, they examine the mediating effect of relationship quality on the association between collaborative activities and supply chain performance. The research model is then tested using survey data (n=219). The authors' results illustrate a positive impact of both collaborative activities and relationship quality on enhancing supply chain performance. Moreover, this paper also supports the hypothesis that relationship quality mediates the relationship between collaborative activities and supply chain performance in third party logistics.

scholarly journals Simulation and Analysis of the Complex Behavior of Supply Chain Inventory System Based on Third-Party Logistics Management Inventory Model with No Accumulating of Unsatisfied Demand

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-18 ◽  
Author(s):  
Zusheng Zhang ◽  
Xu Wang ◽  
Qianqian Guo ◽  
Zhenrui Li ◽  
Yingbo Wu
Keyword(s):  
Supply Chain ◽  
Inventory Model ◽  
Third Party ◽  
Logistics Management ◽  
Practical Significance ◽  
Largest Lyapunov Exponent ◽  
Reconstruction Method ◽  
Third Party Logistics ◽  
Supply Chain System ◽  
Unsatisfied Demand

Under the third-party logistics management inventory model, the system dynamics method is used to establish a nonlinear supply chain system model with supply capacity limitation and nonpermissible return, which is based on unsatisfied demand nonaccumulation. The theory of singular value and the Jury Test are used to derive the stable interval of the model which is simplified. The Largest Lyapunov Exponent (LLE) of the system is calculated by the Wolf reconstruction method and used to analyze the influence of different parameters of system’s stability. Then, the most reasonable and unreasonable combination of decision parameters under different demand environment is found out. Next, this paper compared and analyzed the change of inventory or transportation volume of system members under the combination of rational and irrational decision parameters. All of these provided guidance for decision making, which shows an important practical significance.

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