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Single-vendor multi-buyer supply chain coordination with stochastic demand

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  • Chan, Chi Kin
  • Fang, Fei
  • Langevin, André

Abstract

This paper proposes a model of single-vendor multi-buyer supply chain coordination with stochastic demand in which the vendor's production cycle length and the buyers' ordering cycle lengths are synchronized. A mathematical model for the coordination policy considering possible stock-out and/or excessive stock is formulated, and a solution algorithm for the model is developed. The numerical results show that, under stochastic situation, our coordination model performs better than two other policies, the decentralized decision making model and the common cycle coordination model. Considering the difficulty of estimating shortage cost, trade-off curves are plotted along a range of service levels to further compare the models and reinforce our results.

Suggested Citation

  • Chan, Chi Kin & Fang, Fei & Langevin, André, 2018. "Single-vendor multi-buyer supply chain coordination with stochastic demand," International Journal of Production Economics, Elsevier, vol. 206(C), pages 110-133.
    • Handle: RePEc:eee:proeco:v:206:y:2018:i:c:p:110-133
    DOI: 10.1016/j.ijpe.2018.09.024
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    References listed on IDEAS

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    2. Muhammad Waqas Iqbal & Muhammad Babar Ramzan & Asif Iqbal Malik, 2022. "Food Preservation within Multi-Echelon Supply Chain Considering Single Setup and Multi-Deliveries of Unequal Lot Size," Sustainability, MDPI, vol. 14(11), pages 1-30, June.
    3. Ming Zhang & Jianjun Zhu & Ponnambalam Kumaraswamy & Hehua Wang, 2019. "Evolutionary Game Analysis of the Effects of Problem Size and the Problem Proposing Mechanism on the Problem Processing Mechanism in a New Main Manufacturer–Supplier Collaborative System," Mathematics, MDPI, vol. 7(7), pages 1-19, July.
    4. Heibatolah Sadeghi & Hêriş Golpîra & Faicel Hnaien & Cosimo Magazzino, 2023. "Pricing-inventory model with discrete demand and delivery orders," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 33(3), pages 119-139.

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