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Scenario aggregation for supply chain quantity-flexibility contract

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  • Gitae Kim
  • Chih-Hang Wu

Abstract

In this research, we apply a scenario aggregation approach to solving the supply chain contract model formulated by two-stage stochastic programming problem. The supply chain contract can achieve the coordination between the buyer and the supplier. We formulate the stochastic programming model for a quantity-flexibility contract. The scenario aggregation method called the progressive hedging method is used to solve this problem. Experimental results show the convergence behaviour of the algorithm and the sensitivity of parameters.

Suggested Citation

  • Gitae Kim & Chih-Hang Wu, 2013. "Scenario aggregation for supply chain quantity-flexibility contract," International Journal of Systems Science, Taylor & Francis Journals, vol. 44(11), pages 2166-2182.
    • Handle: RePEc:taf:tsysxx:v:44:y:2013:i:11:p:2166-2182
    DOI: 10.1080/00207721.2012.702237
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    Cited by:

    1. Yingxue Zhao & Tsan-Ming Choi & T. C. E. Cheng & Shouyang Wang, 2017. "Mean-risk analysis of wholesale price contracts with stochastic price-dependent demand," Annals of Operations Research, Springer, vol. 257(1), pages 491-518, October.
    2. Subrata Saha, 2016. "Channel characteristics and coordination in three-echelon dual-channel supply chain," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(3), pages 740-754, February.
    3. Heydari, Jafar & Govindan, Kannan & Ebrahimi Nasab, Hamid Reza & Taleizadeh, Ata Allah, 2020. "Coordination by quantity flexibility contract in a two-echelon supply chain system: Effect of outsourcing decisions," International Journal of Production Economics, Elsevier, vol. 225(C).

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