IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v83y2015icp65-89.html
   My bibliography  Save this article

The two-stage batch ordering strategy of logistics service capacity with demand update

Author

Listed:
  • Liu, Weihua
  • Liu, Xiaoyan
  • Li, Xiang

Abstract

This paper discusses a logistics service integrator (LSI) orders logistics service capacity from a functional logistics service provider (FLSP) before the selling season with two opportunities. The optimal two-stage batch ordering strategy of LSI with demand update is studied. Standard batch size is introduced into LSI’s two-stage capacity ordering strategy model, which is built upon the decision-making sequence and actually observed demand signals between the two ordering instants. The model solution method is designed based on scenario analysis and enumerative algorithm. Sensitivity analysis of the optimal adjustment ordering time point is then carried out and a numerical analysis is presented.

Suggested Citation

  • Liu, Weihua & Liu, Xiaoyan & Li, Xiang, 2015. "The two-stage batch ordering strategy of logistics service capacity with demand update," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 83(C), pages 65-89.
    • Handle: RePEc:eee:transe:v:83:y:2015:i:c:p:65-89
    DOI: 10.1016/j.tre.2015.08.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554515001659
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2015.08.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Agnetis, Alessandro & Aloulou, Mohamed Ali & Fu, Liang-Liang, 2014. "Coordination of production and interstage batch delivery with outsourced distribution," European Journal of Operational Research, Elsevier, vol. 238(1), pages 130-142.
    2. Chen, Haoya & Chen, Jian & Chen, Youhua (Frank), 2006. "A coordination mechanism for a supply chain with demand information updating," International Journal of Production Economics, Elsevier, vol. 103(1), pages 347-361, September.
    3. Chen, Bo & Lee, Chung-Yee, 2008. "Logistics scheduling with batching and transportation," European Journal of Operational Research, Elsevier, vol. 189(3), pages 871-876, September.
    4. Marshall Fisher & Ananth Raman, 1996. "Reducing the Cost of Demand Uncertainty Through Accurate Response to Early Sales," Operations Research, INFORMS, vol. 44(1), pages 87-99, February.
    5. Xiao, Tiaojun & Shi, Kuiran & Yang, Danqin, 2010. "Coordination of a supply chain with consumer return under demand uncertainty," International Journal of Production Economics, Elsevier, vol. 124(1), pages 171-180, March.
    6. Hariga, Moncer & Haouari, Mohamed, 1999. "An EOQ lot sizing model with random supplier capacity," International Journal of Production Economics, Elsevier, vol. 58(1), pages 39-47, January.
    7. Almehdawe, Eman & Jewkes, Elizabeth, 2013. "Performance analysis and optimization of hybrid manufacturing systems under a batch ordering policy," International Journal of Production Economics, Elsevier, vol. 144(1), pages 200-208.
    8. Choi, Tsan-Ming (Jason) & Li, Duan & Yan, Houmin, 2006. "Quick response policy with Bayesian information updates," European Journal of Operational Research, Elsevier, vol. 170(3), pages 788-808, May.
    9. Özen, Ulaş & Sošić, Greys & Slikker, Marco, 2012. "A collaborative decentralized distribution system with demand forecast updates," European Journal of Operational Research, Elsevier, vol. 216(3), pages 573-583.
    10. Haresh Gurnani & Christopher S. Tang, 1999. "Note: Optimal Ordering Decisions with Uncertain Cost and Demand Forecast Updating," Management Science, INFORMS, vol. 45(10), pages 1456-1462, October.
    11. Andrew Lim & Brian Rodrigues & Zhou Xu, 2008. "Transportation Procurement with Seasonally Varying Shipper Demand and Volume Guarantees," Operations Research, INFORMS, vol. 56(3), pages 758-771, June.
    12. Yang, Yi & Yuan, Quan & Xue, Weili & Zhou, Yun, 2014. "Analysis of batch ordering inventory models with setup cost and capacity constraint," International Journal of Production Economics, Elsevier, vol. 155(C), pages 340-350.
    13. Hwang, Juhwen & Wan, Yat-wah, 2013. "A supplier–retailer supply chain with intermediate storage for batch ordering," International Journal of Production Economics, Elsevier, vol. 142(2), pages 343-352.
    14. Li, Xiaoming & Sridharan, V., 2008. "Characterizing order processes of using (R,nQ) inventory policies in supply chains," Omega, Elsevier, vol. 36(6), pages 1096-1104, December.
    15. Noblesse, Ann M. & Boute, Robert N. & Lambrecht, Marc R. & Van Houdt, Benny, 2014. "Characterizing order processes of continuous review (s,S) and (r,nQ) policies," European Journal of Operational Research, Elsevier, vol. 236(2), pages 534-547.
    16. Meimei Zheng & Yan Shu & Kan Wu, 2015. "On optimal emergency orders with updated demand forecast and limited supply," International Journal of Production Research, Taylor & Francis Journals, vol. 53(12), pages 3692-3719, June.
    17. Markus Ettl & Gerald E. Feigin & Grace Y. Lin & David D. Yao, 2000. "A Supply Network Model with Base-Stock Control and Service Requirements," Operations Research, INFORMS, vol. 48(2), pages 216-232, April.
    18. Karen L. Donohue, 2000. "Efficient Supply Contracts for Fashion Goods with Forecast Updating and Two Production Modes," Management Science, INFORMS, vol. 46(11), pages 1397-1411, November.
    19. Chang, Ching-Hui & Pal, Nabendu, 2008. "Testing on the common mean of several normal distributions," Computational Statistics & Data Analysis, Elsevier, vol. 53(2), pages 321-333, December.
    20. Chen, M. S. & Chuang, C. C., 2000. "An extended newsboy problem with shortage-level constraints," International Journal of Production Economics, Elsevier, vol. 67(3), pages 269-277, October.
    21. Lau, Hon-Shiang & Lau, Amy Hing-Ling, 1997. "Reordering strategies for a newsboy-type product," European Journal of Operational Research, Elsevier, vol. 103(3), pages 557-572, December.
    22. Ananth. V. Iyer & Mark E. Bergen, 1997. "Quick Response in Manufacturer-Retailer Channels," Management Science, INFORMS, vol. 43(4), pages 559-570, April.
    23. Dong, Ming & Frank Chen, F., 2005. "Performance modeling and analysis of integrated logistic chains: An analytic framework," European Journal of Operational Research, Elsevier, vol. 162(1), pages 83-98, April.
    24. Weihua Liu & Dong Xie & Yang Liu & Xiaoyan Liu, 2015. "Service capability procurement decision in logistics service supply chain: a research under demand updating and quality guarantee," International Journal of Production Research, Taylor & Francis Journals, vol. 53(2), pages 488-510, January.
    25. Wang, Shaojun & Sarker, Bhaba R., 2006. "Optimal models for a multi-stage supply chain system controlled by kanban under just-in-time philosophy," European Journal of Operational Research, Elsevier, vol. 172(1), pages 179-200, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Song, Shuang & Govindan, Kannan & Xu, Lei & Du, Peng & Qiao, Xiaojiao, 2017. "Capacity and production planning with carbon emission constraints," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 97(C), pages 132-150.
    2. Ren, Shuyun & Choi, Tsan-Ming & Lee, Ka-Man & Lin, Lei, 2020. "Intelligent service capacity allocation for cross-border-E-commerce related third-party-forwarding logistics operations: A deep learning approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 134(C).
    3. Song, Zhuzhu & Tang, Wansheng & Zhao, Ruiqing, 2017. "Ocean carrier canvassing strategies with uncertain demand and limited capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 104(C), pages 189-210.
    4. Wang, Kai & Ding, Peiqi & Zhao, Ruiqing, 2021. "Strategic credit sales to express retail under asymmetric default risk and stochastic market demand," Omega, Elsevier, vol. 101(C).
    5. Liu, Weihua & Yan, Xiaoyu & Wei, Wanying & Xie, Dong, 2019. "Pricing decisions for service platform with provider’s threshold participating quantity, value-added service and matching ability," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 410-432.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Weihua Liu & Donglei Zhu & Yijia Wang, 2017. "Capacity Procurement in Logistics Service Supply Chain with Demand Updating and Rational Expectation Behavior," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 34(06), pages 1-48, December.
    2. Choi, Tsan-Ming & Chow, Pui-Sze, 2008. "Mean-variance analysis of Quick Response Program," International Journal of Production Economics, Elsevier, vol. 114(2), pages 456-475, August.
    3. Choi, Tsan-Ming & Sethi, Suresh, 2010. "Innovative quick response programs: A review," International Journal of Production Economics, Elsevier, vol. 127(1), pages 1-12, September.
    4. Choi, Tsan-Ming, 2007. "Pre-season stocking and pricing decisions for fashion retailers with multiple information updating," International Journal of Production Economics, Elsevier, vol. 106(1), pages 146-170, March.
    5. Serel, Dogan A., 2009. "Optimal ordering and pricing in a quick response system," International Journal of Production Economics, Elsevier, vol. 121(2), pages 700-714, October.
    6. Weihua Liu & Shuqing Wang & DongLei Zhu & Di Wang & Xinran Shen, 2018. "Order allocation of logistics service supply chain with fairness concern and demand updating: model analysis and empirical examination," Annals of Operations Research, Springer, vol. 268(1), pages 177-213, September.
    7. M A Rahman & B R Sarker & L A Escobar, 2011. "Peak demand forecasting for a seasonal product using Bayesian approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(6), pages 1019-1028, June.
    8. Choi, Tsan-Ming (Jason) & Li, Duan & Yan, Houmin, 2006. "Quick response policy with Bayesian information updates," European Journal of Operational Research, Elsevier, vol. 170(3), pages 788-808, May.
    9. Serel, Doğan A., 2012. "Multi-item quick response system with budget constraint," International Journal of Production Economics, Elsevier, vol. 137(2), pages 235-249.
    10. Mark E. Ferguson & Gregory A. DeCroix & Paul H. Zipkin, 2005. "Commitment decisions with partial information updating," Naval Research Logistics (NRL), John Wiley & Sons, vol. 52(8), pages 780-795, December.
    11. Zhou, Yong-Wu & Wang, Sheng-Dong, 2009. "Manufacturer-buyer coordination for newsvendor-type-products with two ordering opportunities and partial backorders," European Journal of Operational Research, Elsevier, vol. 198(3), pages 958-974, November.
    12. Weihua Liu & Xinran Shen & Di Wang, 2020. "The impacts of dual overconfidence behavior and demand updating on the decisions of port service supply chain: a real case study from China," Annals of Operations Research, Springer, vol. 291(1), pages 565-604, August.
    13. Cai, Wenbo & Abdel-Malek, Layek & Hoseini, Babak & Rajaei Dehkordi, Sharareh, 2015. "Impact of flexible contracts on the performance of both retailer and supplier," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 429-444.
    14. Seung Hwan Jung, 2020. "Offshore versus Onshore Sourcing: Quick Response, Random Yield, and Competition," Production and Operations Management, Production and Operations Management Society, vol. 29(3), pages 750-766, March.
    15. Li Chen & Bin Hu, 2017. "Is Reshoring Better Than Offshoring? The Effect of Offshore Supply Dependence," Manufacturing & Service Operations Management, INFORMS, vol. 19(2), pages 166-184, May.
    16. Chen, Haoya & Chen, Jian & Chen, Youhua (Frank), 2006. "A coordination mechanism for a supply chain with demand information updating," International Journal of Production Economics, Elsevier, vol. 103(1), pages 347-361, September.
    17. Soo-Haeng Cho & Christopher S. Tang, 2013. "Advance Selling in a Supply Chain Under Uncertain Supply and Demand," Manufacturing & Service Operations Management, INFORMS, vol. 15(2), pages 305-319, May.
    18. DeYong, Gregory D. & Cattani, Kyle D., 2012. "Well adjusted: Using expediting and cancelation to manage store replenishment inventory for a seasonal good," European Journal of Operational Research, Elsevier, vol. 220(1), pages 93-105.
    19. Julia Miyaoka & Warren H. Hausman, 2008. "How Improved Forecasts Can Degrade Decentralized Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 10(3), pages 547-562, July.
    20. Thonemann, U. W., 2002. "Improving supply-chain performance by sharing advance demand information," European Journal of Operational Research, Elsevier, vol. 142(1), pages 81-107, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:83:y:2015:i:c:p:65-89. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.