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Evaluating the impact of misplacement errors on decentralized retail supply chain

Author

Listed:
  • Zied Jemai

    (LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec)

  • Yacine Rekik

    (LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec)

  • Evren Sahin

    (LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec)

  • Yves Dallery

    (LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec)

Abstract

This paper studies a supply chain in which a manufacturer sells a single product to a retailer who faces a Newsvendor problem subject to inventory inaccuracies. Due to execution problems, all products received from the manufacturer are not available on shelf for sales either because they are lost in the backroom or misplaced in the store. We consider three scenarii: in the Centralized Scenario, we consider a single decision-maker who is concerned with maximizing the entire chain's profit. In the Decentralized Uncoordinated Scenario, the retailer and manufacturer act as different parties and do not cooperate. The third scenario is the Decentralized Coordinated Scenario where we give conditions for coordinating the channel under a buyback contract. We analyze the impact of misplacement errors, in terms of additional underage and overage costs, on the store performance and we investigate the effect of coordination as a lever to increase manufacturer and retailer's profits.

Suggested Citation

  • Zied Jemai & Yacine Rekik & Evren Sahin & Yves Dallery, 2006. "Evaluating the impact of misplacement errors on decentralized retail supply chain," Post-Print hal-01672450, HAL.
    • Handle: RePEc:hal:journl:hal-01672450
    as

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