S.P. Sarmah

Buyer vendor coordination models in supply chain management

Coordination between two different business entities is an important way to gain competitive advantage as it lowers supply chain cost. This paper reviews literature dealing with buyer vendor coordination models that have used quantity discount as coordination mechanism under deterministic environment and classified the various models. An effort has also been made to identify critical issues and scope of future research. � 2005 Elsevier B.V. All rights reserved.

Coordination and profit sharing between a manufacturer and a buyer with target profit under credit option

Several studies have focused on buyer vendor coordination through quantity discount/credit option mechanism but few quantitative models and investigations are available that have explored the mechanism for transfer of surplus generated due to coordination. In this paper, we develop a coordination mechanism through credit option such that both the parties can divide the surplus equitably after satisfying their own profit targets. Two situations are explored here; in the first situation; both the parties have no individual profit target from the business whereas in the second situation, there are individual profit target for both the parties. The proposed mechanism for division of surplus is studied through a numerical study and the impact of different parameter values on the results are examined.

Coordination and price competition in a duopoly common retailer supply chain

This paper analyzes the coordination and competition issues in a two-stage supply-chain distribution system where two vendors compete to sell differentiated products through a common retailer in the same market. The demand of a product not only depends on its own price, but also on the price of the other. Mathematical models have been developed to analyze the coordination issues under three different contexts: (i) price competition without channel coordination; (ii) price competition with channel coordination; and (iii) global coordination. It has been shown that under certain conditions, price competition through the dynamic process of price adjustment reaches the Nash-Bertrand equilibrium. Conditions have been derived for the Nash-Bertrand equilibrium to be dynamically stable. Further, it has been shown that duopoly competition can make consumers better-off or worse-off depending on the degree of product differentiation and the type of the product; while coordination enhances overall supply-chain profitability. The model is illustrated with suitable numerical examples.

Shuffled frog leaping algorithm and its application to 0/1 knapsack problem

Abstract This paper proposes a modified discrete shuffled frog leaping algorithm (MDSFL) to solve 01 knapsack problems. The proposed algorithm includes two important operations: the local search of the ‘particle swarm optimization’ technique; and the competitiveness mixing of information of the ‘shuffled complex evolution’ technique. Different types of knapsack problem instances are generated to test the convergence property of MDSFLA and the result shows that it is very effective in solving small to medium sized knapsack problems. Further, computational experiments with a set of large-scale instances show that MDSFL can be an efficient alternative for solving tightly constrained 01 knapsack problems.

Supply chain performance measurement for third party logistics

Purpose – The purpose of the paper is to explore the applicability of the Supply Chain Operations Reference (SCOR) model and to identify the key performance indicators (KPIs) for the service-oriented sector – namely a third-party logistics (3PL) service provider. Design/methodology/approach – The performance attributes of SCOR model (reliability, responsiveness, flexibility, cost measures and asset management efficiency) are used as the basis for defining the KPIs. A questionnaire was sent to relevant decision makers. Findings – This paper illustrates the use of the integrated approach of SCOR, fuzzy analytic hierarchy process (FAHP) and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) for measuring the supply chain performance (SCP) in the light of a real life case study company. Research limitations/implications – This method forms the basis for performance measurement using the SCOR model to evaluate strategy. In this work, the performance of the company has been compared with it...

Optimal acquisition price management in a remanufacturing system

Return items received from end customers for remanufacturing is uncertain in nature. In this paper, we considered that return demand function is uncertain and sensitive to the acquisition price and the availability of used products in the market. A mathematical model was developed to investigate the impact of the availability of return items in the market on acquisition price management. Here, three different methods of collection of return items from the market are considered: direct method, indirect method and coordinated method. A numerical study was conducted to illustrate the mathematical model, and an extensive sensitivity analysis was carried out for the three different methods of collection to examine the impact of market size and the available dependency factor on acquisition price and the channel profit. The results show that the total channel profit increases when the acquisition price increases for the direct method of collection. Furthermore, the results reveal that the total channel profit increases when the market size increases for the coordinated method of collection compared with the other two methods of collection.

Supply chain coordination under retail competition using stock dependent price-setting newsvendor framework

Short life-cycle products which are characterized by uncertain demand, short selling season and long lead times have been posing many challenges to supply chain members. Demand of these products depends on several factors such as price, quality, service etc. Apart from these, many business practices have revealed that presence of a larger quantity of goods displayed at retail level also attract customers considerably. This paper captures the stock dependency phenomenon and investigates the role of quantity discounts and returns policies in the coordination of a supply chain. Here, the manufacturer in addition to returns policy provides quantity discounts to two competing retailers who face price-sensitive, stock dependent and uncertain demand. Using the newsvendor framework, a combined contract model is developed and sensitivity analysis is performed to analyze the impact of various parameters on supply chain coordination. The result shows that proposed contract mechanism fails to coordinate when the value of price sensitivity factor approaches the value of cross price sensitivity factor. Further, price-sensitivity and cross-price sensitivity have little effect on coordination benefit at lower values of stock dependency whereas there is a significant impact at higher values of stock dependency.

An application of fuzzy set theory for supply chain coordination

Abstract One of the important issues in supply chain management is the coordination among different members of the supply chain. In this paper, we have studied a two-stage supply chain coordination problem under uncertain cost and demand information. The aim of the paper is to design a coordination mechanism through quantity discount policy under asymmetric information environment that allows the system to perform as closely as that of under complete information. Fuzzy set theory is applied to estimate the uncertainty associated with the input parameters and triangular membership function has been used to analyze the model. Finally, the model is illustrated with a suitable numerical example.

Supply-chain coordination model with insufficient production capacity and option for outsourcing

In this paper, a mathematical model is developed to analyze the situation of lost sales from the supply-chain coordination perspective. In a two-stage supply chain, the suppliers production capacity is less than the annual demand of the retailer. The supplier may recover the deficit by procuring the same from an external source at a certain price and then supplying it back to the retailer. Here, the conditions have been derived when the practice of external procurement may be a viable solution to enhance the profits of both the supplier and retailer in a coordinated approach. A numerical example is carried out to illustrate the efficacy of the developed model and the procedure developed for solving the problem.

Evolutionary stability of auction and supply chain contracting: An analysis based on disintermediation in the Indian tea supply chains

The purpose of this paper is to show that evolutionary stable market equilibrium is achievable through complete disintermediation of auctioneers if the option of bargaining-based supply chain contracting exists. The paper analyzes the evolutionary dynamics of a market that caters both the scopes of auction-intermediation and supply chain contracting to a set of homogeneous buyers and sellers. The motivation of this work developed from the contradiction between the theoretical framework of Lu and McAfee (1996) that identifies auction to be evolutionary stable over bargaining and the real instance of sustained disintermediation of auctioneers in the worlds largest tea industry in India where supply chain contracting is the other option of trading.