Capacity-delivery coordination in supply chains: a cost-based approach

Lihua Chen, Alfred L. Guiffrida and Pratim Datta

International Journal of Operational Research, 2018, vol. 32, issue 3, 290-312

Abstract: We develop a cost-based model considering a two-stage supply chain with a buyer ordering from a supplier. The model is constructed to coordinate the supply chain by joint decisions over delivery performance and capacity management. In this model, the supplier randomly assigns a portion of his permanent capacity to the buyer and the buyer determines his order quantity accordingly. A delivery window is used to classify deliveries as early, on-time or late and is used to evaluate the delivery performance of the supplier when delivery time is governed by a truncated normal probability density function. Numerical sensitivity analyses are presented to illustrate the significant managerial implications of this model.

Keywords: supply chain coordination; delivery timeliness; capacity allocation. (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijores:v:32:y:2018:i:3:p:290-312

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