T. Maiti

Supply chain model with price- and trade credit-sensitive demand under two-level permissible delay in payments

This article develops a single-manufacturer and single-retailer supply chain model under two-level permissible delay in payments when the manufacturer follows a lot-for-lot policy in response to the retailers demand. The manufacturer offers a trade credit period to the retailer with the contract that the retailer must share a fraction of the profit earned during the trade credit period. On the other hand, the retailer provides his customer a partial trade credit which is less than that of the manufacturer. The demand at the retailer is assumed to be dependent on the selling price and the trade credit period offered to the customers. The average net profit of the supply chain is derived and an algorithm for finding the optimal solution is developed. Numerical examples are given to demonstrate the coordination policy of the supply chain and examine the sensitivity of key model-parameters.

Note on effects of joint replenishment and channel coordination for managing multiple deteriorating products in a supply chain

Table 1 Optimal results for low and high levels of deterioration rate and unit cost of the retailer Policy Optimal decisions Low deterioration rate High deterioration rate Low unit cost High unit cost I T 1

Coordinating a three-layer supply chain with uncertain demand and random yield

The paper considers a three-layer supply chain involving one raw-material supplier, one manufacturer and one retailer. The market demand is assumed to be stochastic and productions at the raw-material supplier and manufacturer are subject to random yield. The centralised model is studied as the benchmark case. The decentralised model is solved and Nash equilibrium solutions are obtained. It is shown that buyback contract fails to coordinate such a supply chain. However, a composite contract framed combining buyback, and sales rebate and penalty contracts is shown to coordinate the supply chain. Numerical examples are provided to illustrate the developed models.

Supply Chain Model for a Deteriorating Product with Time-Varying Demand and Production Rate

The paper develops a two-echelon supply chain model with a single-buyer and a single-vendor. The buyer sells a seasonal product over a short selling period and its inventory is subject to deterioration at a constant rate over time. The vendors production rate is dependent on the buyers demand rate, which is a linear function of time. Also, the vendors production process is not perfectly reliable; it may shift from an in-control state to an out-of-control state at any time during a production run and produce some defective (non-conforming) items. Assuming that the vendor follows a lot-for-lot policy for replenishment made to the buyer, the average total cost of the supply chain is derived and an algorithm for finding the optimal solution is developed. The numerical study shows that the supply chain coordination policy is more beneficial than those policies obtained separately from the buyers and the vendors perspectives.

Trade credit competition between two retailers in a supply chain under credit-linked retail price and market demand

The paper considers a supply chain system in which the sole manufacturer supplies the same product to two retailers who compete in offering trade credit period to customers. Both the market demand and retail prices vary with the trade credit periods offered by the retailers. The manufacturer also provides a trade credit period to both the retailers to settle down their accounts. The net profit function of the supply chain is derived considering possible relationships among the trade credit periods offered by the manufacturer and the retailers and the time when each retailer receives the last payment from his customer. An algorithm is developed to find the optimal solution of the proposed model. From the numerical study, it is observed that a two-level trade credit financing can increase profits not only for the manufacturer and the retailers but also for the whole supply chain.

Consignment stock policy with unequal shipments and process unreliability for a two-level supply chain

This paper considers a vendor managed inventory model with consignment stock policy in which a single vendor delivers a single product to a single buyer in unequal-sized shipments. The vendor’s production process may produce some defective items during a production run. The buyer performs a screening process immediately after receiving each delivery from the vendor and the vendor bears the warranty cost of defective item, if any. The buyer either scraps or repairs the defective items by sending them to a repair factory. The average expected profit of the integrated system is derived using renewal reward theorem and a solution procedure is suggested to determine the optimal shipment policy of the vendor. Numerical examples are taken to determine both the equal and unequal shipment policies and compare their relative performances.

Trade credit competition between two manufacturers in a two-echelon supply chain under credit-linked retail price and market demand

This paper considers a two-echelon supply chain model in which two manufacturers produce the same product but compete with each other in offering trade credit to their common retailer. The retailer also offers trade credit to the end customer to enhance market demand. The retailer’s demand and retail price both vary with the length of the credit period. The supply chain’s profit function is derived considering all possible cases of the trade credit period offered by the manufacturers and the retailer. The model is demonstrated numerically with a suggested algorithm. It is observed that the whole supply chain’s profit is higher for shorter cycle time and higher retail price.

Coordinating a two-echelon supply chain with price and promotional effort dependent demand

Apart from retail price, promotional effort is an important factor that controls market demand. Primary objective of promotional effort is to reach the potential customers and presenting the unique features, efficiency and usefulness of the product. Assuming that the market demand is dependent on both the retail price and promotional efforts, a two-level supply chain with single manufacturer and single retailer is considered in this paper. We study the centralised model as the benchmark case. To reflect the real market scenario, the wholesale price-only contract is provided. Aiming at coordination, different contract mechanisms are attempted, and finally a suitable one is developed. We also provide two possible extensions of the decentralised model: one by using co-op advertising policy, and other one by incorporating retail fixed mark-up (RFM). All the models are further illustrated and analysed numerically.

Profit improvement through retailer–Stackelberg in a multi-echelon supply chain of deteriorating product with price-sensitive demand

In this paper, an attempt is made to improve profit through a retailer–Stackelberg game in a multi-echelon supply chain involving one supplier, one manufacturer, and one retailer having deterministic price-sensitive demand. Inventory in each echelon is subject to deterioration. We assume that the supplier and the manufacturer follow a multi-shipment policy to deliver to the manufacturer and the retailer, respectively. The proposed model is developed first under centralized decision policy which is the benchmark case. Then the decentralized model is developed and profit improvement is done through a retailer–Stackelberg game. The optimal results are demonstrated and a sensitivity analysis is performed for a numerical data-set.

Effectiveness of consignment stock policy in a three-level supply chain

The paper studies a three-level supply chain having one supplier, one vendor and multiple buyers under multi-shipment consignment stock policy which is applied by the supplier when he delivers semi-finished products to the vendor. The vendor who produces fully finished products applies the same policy when he delivers to buyers. The integrated system cost which consists of production cost, shipment cost and stock-holding cost is minimized subject to no-shortage in any part of the chain. Optimal decisions are obtained for a numerical example. It is found that the consignment stock policy performs better than the usual shipment policy when the stocking component of holding cost of the item is less in the downstream. The effectiveness of the consignment stock policy under different situations is also investigated.