A note on the effectiveness of scheduled balanced ordering in a one-supplier two-retailer system with uniform end-customer demands

Lucy Gongtao Chen and Srinagesh Gavirneni

International Journal of Production Economics, 2013, vol. 146, issue 1, 240-245

Abstract: For a decentralized supply chain with one supplier and two retailers that face uniformly distributed end-customer demands, a scheduled balanced ordering policy (SBOP) is one in which the two retailers take turns to order freely in one period of a two-period cycle, and receive a fixed shipment in the other period. We develop mathematical conditions, on the supplier and retailer cost parameters, that predict the effectiveness of the SBOP strategy in reducing total supply chain cost. We find that SBOP is often effective when the supplier has cost parameters larger than the retailers. We also show that SBOP can be effective even when there is no information sharing in the supply chain. Further, the effectiveness of SBOP is robust with respect to demand assumptions.

Keywords: Schedule balanced ordering; Inventory; Supply chain management (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:146:y:2013:i:1:p:240-245

DOI: 10.1016/j.ijpe.2013.07.004

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