 Buyer-supplier cooperation and negotiation support with random yield considerationPeter Kelle, Sandra Transchel and Stefan Minner International Journal of Production Economics, 2009, vol. 118, issue 1, 152-159 Abstract: Random yield is still prevailing in several industries despite quality improvement efforts. In this case, the supply chain partners jointly must find the best way to cope with yield uncertainty. We focus on the inventory-related costs that can be influenced by adjusting the ordering, setup, and delivery policy to the random yield. The yield model of having a random proportion of defective items is assumed with known mean and variance. Two alternative scenarios are examined: when the buyer or when the supplier makes 100% inspection. We provide analytic tools and approximations to optimize the decisions. Our main contribution is to help in the cooperation and negotiation process by showing under which circumstances have the yield characteristics important effects and when are they negligible. We show that not the average yield but the yield uncertainty plays the critical role mainly in providing an appropriate service level but also in finding the optimal shipment and setup policy. Keywords: Inventory; Supply; chain; Random; yield; Cooperation; Negotiation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:118:y:2009:i:1:p:152-159 Access Statistics for this article International Journal of Production Economics is currently edited by Stefan Minner More articles in International Journal of Production Economics from Elsevier |
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