The role of elasticity in supply chain performance

This paper develops a model that describes the performance of supply chains based on their elasticities of supply and demand. The model can be used to predict a supply chain's ability to respond to supply interruptions, cost increases, and demand shifts, while also quantifying the degree to which it is prone to the bullwhip effect. The bullwhip effect is a behavioral phenomenon by which orders are distorted as they are transmitted through the chain. Four types of supply chains are identified and their distinct operating characters are examined. The impact of rival firms and the impact of a decoupling point on supply chain performance are also examined.     

基于SD的牛鞭效应建模与仿真分析

通过建立一个三级供应链系统的SD模型,研究探讨牛鞭效应的产生机制及弱化途径。仿真结果表明,牛鞭效应很大程度上是供应链体系自身的特点和结构造成的,而采用具有信息共享机制的VMI订货模式可以大大弱化牛鞭效应,能够有效降低供应链各节点的库存成本。     

基于促销行为的供应链牛鞭效应分析

供应链中的牛鞭效应起源于管理者追求利润最大化的理性决策,价格波动是产生牛鞭效应的主要原因之一,而价格波动常常是由零售商周期性地采取一些特殊促销行为引起的.本文通过考虑在动态需求环境下,存在一个包含有一个供应商与一个零售商的简单供应链,当下游零售商有促销行为时与无促销行为时进行定量分析比较,并分析基于促销行为的零售商收益大于库存成本时的牛鞭效应,结果表明,零售商的促销行为很大程度上加剧了牛鞭效应,只有当产品价格比较稳定时,才能尽量避免和减少牛鞭效应.     

The analysis of bullwhip effect in a HMMS-type supply chain

The aim of the paper is to investigate the well-known bullwhip effect of supply chains. Control theoretic analysis of bullwhip effect is extensively analyzed in the literature with the Laplace transform. This paper tries to examine the effect for an extended Holt-Modigliani-Muth-Simon model. A two-stage supply chain (supplier-manufacturer) is studied with quadratic costs functional. It is assumed that both firms minimize the relevant costs. The order of the manufacturer is delayed with a known constant. Two cases are examined: supplier and manufacturer minimize the relevant costs decentralized, and a centralized decision rule. The question is answered, how to decrease the bullwhip effect.     

Variance amplification and the golden ratio in production and inventory control

A discrete linear control theory model of a generic model of a replenishment rule is presented. The replenishment rule, which we term a “Deziel Eilon—automatic pipeline, inventory and order-based production control system”, is guaranteed to be stable. From a z-transform model of the policy, an analytical expression for bullwhip is derived that is directly equivalent to the common statistical measure often used in simulation, statistical and empirical studies to quantify the bullwhip effect. This analytical expression clearly shows that we can reduce bullwhip by taking a fraction of the error between the target and actual inventory and pipeline (or work in progress (WIP) or “orders placed but not yet received”) positions. This is in contrast to the common situation where ordering policies account for all of the error every time an order is placed. Furthermore, increasing the average age of the forecast reduces bullwhip, as does reducing the production/distribution lead-time. We then derive an analytical expression for inventory variance using the same procedure to identify the closed form bullwhip expression.We assume that a suitable objective function is linearly related to the bullwhip and inventory variance amplification ratios and then optimise the PIC system for different weightings of order rate and inventory level variance. We highlight two forms of the objective function, one where “the golden ratio” can be used to determine the optimal gain in the inventory and WIP feedback loop and another that allows the complete range of possible solutions to be visualised. It is interesting that the golden ratio, which commonly describes the optimum behaviour in the natural world, also describes the optimal feedback gain in a production and inventory control system.     

Strategic investments under competition for access provision

We examine competition for access provision when symmetric vertically integrated firms invest in infrastructure upgrades. Spillovers through access have two effects (a wholesale-profit effect and a retail-production effect) on infrastructure investment made by vertically integrated firms. When the vertically integrated firms freely set access charges, due to the dominance of the wholesale-profit effect, quality differentials endogenously occur between these firms (asymmetric equilibria). When access charges are regulated, symmetric equilibria occur with multiple equilibrium investments due to the retail-production effect. Because competition for access provision induces a strong incentive for infrastructure investment, it also achieves a higher social welfare than does access regulation.     

A review of the extensions of a modified EOQ model for imperfect quality items

Imperfect items in the raw material and production stages of a supply chain directly impact the coordination of the product flow within a supply chain. In response to this concern, production and inventory lot sizing models, which incorporate imperfect items into their formulation have become an important and growing area of research. The contribution of Salameh and Jaber (2000) is one of the fundamental models on lot sizing when procured items are of imperfect quality. Over the past decade, there has been a noticeable amount of interest in the EOQ model for imperfect items that was set forth in Salameh and Jaber (2000). Several researchers have published adaptations and extensions of this original model that address supply chain coordination, quality improvement and yield management, and the impact of human error on production and inventory systems. In this paper, we summarize the current body of research that has extended the Salameh and Jaber (2000) EOQ model for imperfect items. Some possible future research directions are identified at the end of the paper.     

Value innovation,deliberate learning mechanisms and information from supply chain partners

Although marketing scholars have emphasized both the importance of internal learning mechanisms and of external learning through supply chain partners research findings on how these factors influence each other are merely lacking. Analyzing survey data of 182 industrial firms, we examine how information provision by upstream and downstream supply chain parties moderates the effect of internal deliberate learning mechanisms on value innovation ability. Results of the PLS analysis suggest that internal learning mechanisms and external information exchange do not always work symbiotically. Our findings provide interesting results for (the management of) innovation processes and supply chain relations.     

Robust supply chain management

Faced with uncertainty, researchers have explored concepts such as robustness, flexibility, information structure, options, and market power for supply chain management. Despite many influential findings, such as the presence of the bullwhip effect and channel power, the literature in supply chain management is a bit confusing with regard to these concepts, including how they are related to each other. In light of this, we discuss the meaning of the terms in a supply chain management context. We indicate what questions are at stake and some pitfalls to be aware of if the phenomenon we are concerned about is affected by strategic players. This paper is modelling focused.     

Inter-organizational relationships and strategy quality in green supply chains — Moderated by opportunistic behavior and dysfunctional conflict

This paper presents a new research model to examine the factors influencing the quality of strategies developed and implementation in inter-organizational relationships in a green supply chain. In this study, we examine how attitude toward relationship orientation affects inter-organizational strategy quality, and how this association is affected by the opportunistic behavior and dysfunctional conflict. Relationship orientation, measured by relational benefits, relational proclivity, and connectedness, refers to the desire to develop and maintain relationships with green supply chain partners. Data are collected from 451 manufacturing firms that are among the top 1000 Taiwanese manufacturing firms of 2010 listed by Business Weekly. Relationship orientation, or the desire to develop and maintain relationships with collaborative partners, was found to be positively associated with the strategy quality. Our results show that opportunistic behavior and dysfunctional conflict decrease the willingness and damage efforts to establish relationships to enhance the strategy quality for the green supply chain.     

An analysis of the main factors affecting bullwhip in reverse supply chains

The bullwhip effect has drawn the attention of supply chains researchers due to the inefficiencies that this phenomenon generates upstream in the supply chain. Various factors that facilitate its appearance have been identified in the literature. However, in spite of current practices and new environmental regulations having increased the importance of returned material chains, this phenomenon has not been studied in detail in the context of closed loop networks. Here we present an analysis of the influence of factors identified as significant with regard to the bullwhip effect in forward chains on the appearance of the bullwhip effect in environments of reverse logistics and its pattern of evolution along the chain. We do so by using a simulator that extends the logic of the Beer Game to this type of environment. The results confirm the influence of the majority of the factors considered, especially the stock and WIP adjustment controllers, as well as the forecasting technique used, the sharing of information among the links, and the final customer demand variability. With respect to specific reverse supply chains factors, the only significant one identified is the percentage of units returned. We have also studied the factors that in this closed loop environment give rise to the classical upstream growing pattern of the bullwhip effect, observing that an increase in the percentage of material returned reduces the likelihood of finding a growing bullwhip pattern. In addition, it is more likely for this pattern to appear when the demand variation is low.     

A Stackelberg model of pricing of complementary goods under information asymmetry

We consider a duopoly market where two separate firms offer complementary goods in a leader–follower type move. Each firm has private forecast information about the uncertain market demand and decides whether to share it with the other firm. We show that information sharing would benefit the leader firm but hurt the follower firm as well as the total system if the follower firm shares information unconditionally. We then devise a “simple to implement” information sharing scheme under which both firms and the total system are better off. We also provide several interesting managerial insights and establish the robustness of the model in managing a supply chain through our analytical and simulation results.     

A supply chain as a series of filters or amplifiers of the bullwhip effect

The bullwhip effect refers to the phenomenon of amplification and distortion of demand in a supply chain. By eliminating or controlling this effect, it is possible to increase product profitability reducing useless costs such as stock-out and obsolescence costs. The main focus of this work is to study a single-product serial supply chain in which a control parameter can switch the chain from a series of filters to a series of amplifiers of the bullwhip effect and to analyse how the optimal values of the parameters change when discontinuities in order policy are considered. Furthermore, it is also shown that the bullwhip itself it is not a good index of the chain's performance, because it does not consider the oscillations that occur in the inventories, which also may affect the supply-chain performance.     

Complementary assets,start-ups and incentives to innovate

We examine to what extent market conditions facilitating start-up formation affect firms' R&D investment and profits. We consider a model in which R&D efforts of an incumbent firm generate partly tacit technological know-how embodied in a key R&D employee, who might use it to form a start-up. The availability of complementary assets influences whether new firms are created and determine expected profits for start-up's founders. A large availability of complementary assets has the direct effect that the generation of start-ups is fostered. However, as a strategic effect, the incentives of incumbents to invest in R&D may be reduced because of the increased danger of knowledge loss occurring through start-up formation. We characterize the effects of an increase in the availability of complementary assets, showing that counter-intuitively there are cases in which it induces an increase in incumbents' R&D investment.     

A multi-objective robust optimization model for multi-product multi-site aggregate production planning in a supply chain under uncertainty

Manufacturers need to satisfy consumer demands in order to compete in the real world. This requires the efficient operation of a supply chain planning. In this research we consider a supply chain including multiple suppliers, multiple manufacturers and multiple customers, addressing a multi-site, multi-period, multi-product aggregate production planning (APP) problem under uncertainty. First a new robust multi-objective mixed integer nonlinear programming model is proposed to deal with APP considering two conflicting objectives simultaneously, as well as the uncertain nature of the supply chain. Cost parameters of the supply chain and demand fluctuations are subject to uncertainty. Then the problem transformed into a multi-objective linear one. The first objective function aims to minimize total losses of supply chain including production cost, hiring, firing and training cost, raw material and end product inventory holding cost, transportation and shortage cost. The second objective function considers customer satisfaction through minimizing sum of the maximum amount of shortages among the customers’ zones in all periods. Working levels, workers productivity, overtime, subcontracting, storage capacity and lead time are also considered. Finally, the proposed model is solved as a single-objective mixed integer programming model applying the LP-metrics method. The practicability of the proposed model is demonstrated through its application in solving an APP problem in an industrial case study. The results indicate that the proposed model can provide a promising approach to fulfill an efficient production planning in a supply chain.     

Dynamic supply chain coordination under consignment and vendor-managed inventory in retailer-centric B2B electronic markets

This study examines the dynamic performance of vertically decentralized two-echelon channel coordination for deteriorating goods under consignment and vendor-managed inventory (VMI) contracts with revenue sharing from retailer-centric business-to-business transactions in both traditional markets and electronic markets (EMs). The research presents the profit-maximization problem and devises a method for making cross-enterprise dynamic joint decisions by combining calculus with dynamic programming for a retailer-led Stackelberg supply chain under cooperative and non-cooperative game settings over a multi-period planning horizon. The applicability of the proposed model is assessed using a case study involving a highly perishable product, sliced raw fish, in a supply chain comprising a regional seafood supplier and a local store belonging to a large national retail chain. The analytical results show that, in a cooperative setting, the EM with a consigned revenue-sharing VMI contract tends to achieve lower retail prices, larger stock quantity, improved channel efficiency, and increases in both retailer and supplier profits through an additional one-part tariff. Additionally, consumers benefit from lower retail prices and society benefits from increased overall channel profits in the cooperative channel and EM.     

Inventory control in a two-echelon dual-channel supply chain with setup of production and delivery

This paper considers a two-echelon dual-channel supply chain model with setup of production and delivery and develops a new inventory control policy for the supply chain. Previously, a two-echelon supply chain model without setup of production and delivery is considered and a one-for-one inventory control policy is applied to the supply chain. In the inventory control policy, production is stopped when the warehouse inventory reaches the upper limit and is started again immediately after the inventory drops below the limit. Moreover, delivery to the retailer is stopped when the store inventory reaches the upper limit and is started again immediately after the inventory drops below the limit. The total cost that consists of inventory holding costs and lost sales cost is considered, and setup costs are not considered in the total cost. Once setup costs are introduced, the one-for-one inventory control policy is no longer appropriate. Then, this paper develops a new control policy for the two-echelon dual-channel supply chain with setup of production and delivery. As performance measure, the total cost that consists of inventory holding costs, lost sales cost, and production and delivery setup costs is considered, and the total cost calculated on the basis of Markov analysis demonstrates the effectiveness of the proposed control policy.     

Strategic marketing in global supply chains: Four challenges

Supply chain management has emerged as a critical arena in which firms can find significant cost reduction opportunities, giving them a cost advantage over competitors. When supply chain management orientations are adopted by several firms in a supply chain, together they can significantly reduce supply chain costs pitting supply chain against supply chain. However, the pursuit of cost savings opportunities is not the only objective of supply chain management. Superior supply chain management can facilitate marketing strategy and lead to the creation of superior customer value, satisfaction, and loyalty, which in turn lead to improved product profit margins, overall firm profitability, and overall corporate growth. However, marketing strategy is problematic in global supply chains. Specifically, four significant strategic marketing challenges exist that relate to the development and execution of marketing strategy in global supply chains. This article draws attention to these challenges to stimulate managerial and research efforts that will move marketing strategy through the 21st century.     

Competition under capacitated dynamic lot-sizing with capacity acquisition

Lot-sizing and capacity planning are important supply chain decisions, and competition and cooperation affect the performance of these decisions. In this paper, we look into the dynamic lot-sizing and resource competition problem of an industry consisting of multiple firms. A capacity competition model combining the complexity of time-varying demand with cost functions and economies of scale arising from dynamic lot-sizing costs is developed. Each firm can replenish inventory at the beginning of each period in a finite planning horizon. Fixed as well as variable production costs incur for each production setup, along with inventory carrying costs. The individual production lots of each firm are limited by a constant capacity restriction, which is purchased up front for the planning horizon. The capacity can be purchased from a spot market, and the capacity acquisition cost fluctuates with the total capacity demand of all the competing firms. We solve the competition model and establish the existence of a capacity equilibrium over the firms and the associated optimal dynamic lot-sizing plan for each firm under mild conditions.     

Reinventing the wheel? A critical view of demand-chain management

Demand–supply alignment as a means for value creation in the marketplace is not a new concept either in the marketing or supply chain management literature. Recent developments in demand chain management (DCM) revamp this issue, which is particularly critical for today's firms. DCM studies, however, remain isolated from wider academic debates and are unclear on the processes required for the demand–supply alignment inside the firm, incurring the risk of becoming irrelevant. Through a systematic literature review and qualitative content analysis, we leveraged the existing knowledge on interfaces between intra-firm departments to identify the dimensions of demand–supply alignment and map the drivers, enablers and consequences of implementing such an alignment. These outcomes, together with theoretical perspectives, are used to improve the idea of DCM, ground theoretical reflections on the concept and suggest avenues for research. This study should interest researchers and practitioners willing to adopt the DCM strategy.