EconPapers    
Economics at your fingertips  
 

Impacts of decision sequences on a random yield supply chain with a service level requirement

Bo He, Guo Li and Mengqi Liu ()
Additional contact information
Bo He: Chongqing University
Guo Li: Beijing Institute of Technology
Mengqi Liu: Hunan University

Annals of Operations Research, 2018, vol. 268, issue 1, 469-495

Abstract: Abstract The last decade has witnessed a rising trend of social network structures where decision making may be influenced by members’ channel power. This paper considers a decentralized supply chain that comprises a random yield supplier and a manufacturer with a service level requirement. The supplier determines the production quantity while the manufacturer decides on the replenishment quantity. We investigate several game-theoretic models with respect to decision sequences of the supplier and manufacturer with a service level requirement. We compare firms’ equilibrium production/order quantity and profits under these models. Both firms achieve a higher payoff in the manufacturer-leader game than in the supplier-leader and simultaneous move games, which indicates that the manufacturer-leader game is Pareto efficient from the channel structure perspective. A critical value is observed at the service level, beyond which the supplier’s profit decreases, while the manufacturer’s profit increases in the service level requirement. Interestingly, the critical value is independent of the models and it just depends on the wholesale price and production cost. We also examine the decentralized random yield supply chain under the vendor-managed inventory arrangement. Finally, numerical computations are conducted to evaluate supply chain performance with respect to various parameters.

Keywords: Random yield; Decision sequence; Service level; Decentralized supply chain; VMI (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10479-016-2275-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:268:y:2018:i:1:d:10.1007_s10479-016-2275-4

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-11-06
Handle: RePEc:spr:annopr:v:268:y:2018:i:1:d:10.1007_s10479-016-2275-4