A supply chain generalized network oligopoly model for pharmaceuticals under brand differentiation and perishability

In this paper, we construct a generalized network oligopoly model with arc multipliers for supply chains of pharmaceutical products using variational inequality theory. The model captures the Cournot competition among the manufacturers who seek to determine their profit-maximizing product flows, which can be perishable, with the consumers differentiating among the products of the firms, whether branded or generic, and the firms taking into consideration the discarding costs. The numerical examples demonstrate that a brand pharmaceutical product may lose its dominant market share as a consequence of patent rights expiration and because of generic competition.     

Environmental-regulation pricing strategies for green supply chain management

This paper demonstrates that a proper design of environmental-regulation pricing strategies is able to promote Extended Product Responsibility for green supply chain firms in a competitive market. A differential game model comprising Vidale–Wolfe equation has been established in light of sales competition and recycling dynamics as well as regulation related profit function. Analytic solutions of Markovian Nash equilibriums are provided with the necessary condition derived from Hamilton–Jacobi–Bellman equations. We found that governments should opt to gradually raise regulation standards so that rational manufacturers will gradually improve its product recyclability, and, in turn, Extended Product Responsibility will get promoted.     

A location-inventory-pricing model in a supply chain distribution network with price-sensitive demands and inventory-capacity constraints

This paper presents a location-inventory-pricing model for designing the distribution network of a supply chain with price-sensitive demands and inventory-capacity constraints. The supply chain has market power and uses markup pricing. An efficient Lagrangian relaxation algorithm is proposed to solve the model. Our numerical study shows that by moderately increasing the number of possible values for pricing decisions, the model can be used to find near-optimal solutions of a similar location-inventory-pricing problem with continuous pricing decisions. The approach used here to incorporate pricing decisions can be applied to other supply-chain design and planning problems with price-sensitive demands.     

Dynamics and equilibria of ecological predator-prey networks as nature’s supply chains

In this paper, we develop a dynamic network model of ecological food webs and prove that the set of stationary points of the projected dynamical system coincides with the set of solutions of a variational inequality governing the equilibrium of predator-prey networks. We also establish the equivalence between the ecological models and supply chain network equilibrium models and highlight the connections to spatial price equilibrium problems. We propose an algorithmic scheme, provide convergence results, and apply it to a food web drawn from a fisheries application.This paper is a contribution to the interdisciplinary supply chain network literature.     

Global supply chain design: A literature review and critique

In this paper, we review decision support models for the design of global supply chains, and assess the fit between the research literature in this area and the practical issues of global supply chain design. The classification scheme for this review is based on ongoing and emerging issues in global supply chain management and includes review dimensions for (1) decisions addressed in the model, (2) performance metrics, (3) the degree to which the model supports integrated decision processes, and (4) globalization considerations. We conclude that although most models resolve a difficult feature associated with globalization, few models address the practical global supply chain design problem in its entirety. We close the paper with recommendations for future research in global supply chain modeling that is both forward-looking and practically oriented.     

Dynamic electric power supply chains and transportation networks: An evolutionary variational inequality formulation

In this paper, we develop a static electric power supply chain network equilibrium model with known demands and establish the equivalence between the model and a transportation network equilibrium model with fixed demands over an appropriately constructed supernetwork. This equivalence yields a new interpretation of electric power supply chain network equilibria in path flows. We then exploit this equivalence to propose a dynamic electric power supply chain network model in which the demand varies over time using an evolutionary variational inequality formulation. Finally, we demonstrate how numerical dynamic electric power supply chain network problems can be solved utilizing recently obtained theoretical results in the unification of evolutionary variational inequalities and projected dynamical systems.     

A supply chain network equilibrium model

In this paper, an equilibrium model of a competitive supply chain network is developed. Such a model is sufficiently general to handle many decision-makers and their independent behaviors. The network structure of the supply chain is identified and equilibrium conditions are derived. A finite-dimensional variational inequality formulation is established. Qualitative properties of the equilibrium model and numerical examples are given.     

Reliable design of an integrated supply chain with expedited shipments under disruption risks

This paper studied the design of a two-echelon supply chain where a set of suppliers serve a set of terminals that receive uncertain customer demands. In particular, we considered probabilistic transportation disruptions that may halt product supply from certain suppliers. We formulated this problem into an integer nonlinear program to determine the optimal system design that minimizes the expected total cost. A customized solution algorithm based on Lagrangian relaxation was developed to efficiently solve this model. Several numerical examples were conducted to test the proposed model and draw managerial insights into how the key parameters affect the optimal system design.     

Analysis of traffic congestion costs in a competitive supply chain

We study a competitive facility location problem with identical suppliers competing in multiple markets subject to distribution network congestion. We first analyze the solution of a symmetric competitive location game and discuss the firms’ facility location and equilibrium market supply decisions. Then, we utilize the model to provide analytical characterization of the effects of traffic congestion costs on equilibrium distribution flows. These analytical results permit qualitative characterization of how changes in congestion levels and costs affect equilibrium location and distribution decisions. The results of extensive numerical studies serve to further illustrate the effects of traffic congestion costs on location, market supply quantity, and distribution decisions.     

Design of international assembly systems and their supply chains under NAFTA

The purpose of this paper is to provide a decision support aid for the strategic design of an assembly system in the international business environment created by NAFTA. The strategic design problem is to prescribe a set of facilities, including their locations, technologies, and capacities, as well as strategic aspects of the supply chain, selecting suppliers; locating distribution centers; planning transportation modes; and allocating target levels (i.e., amounts) for production, assembly, and distribution. The objective is to maximize after-tax profits. This paper presents a mixed integer programming model that represents the complexities of the international design problem as well as relevant enterprise-wide decisions in the US–Mexico business environment under NAFTA. It deals with a broad set of design issues (e.g., bill-of-material restrictions, international financial considerations, and material flow through the entire supply chain) using effective modeling devices (e.g., linearizing non-linearities that arise in modeling transfer prices and allocating transportation charges). Examples demonstrate how managers might use the model as a decision support aid.     

Existence and efficiency of oligopoly equilibrium under toll and capacity competition

This paper studies the existence and efficiency of oligopoly equilibrium under simultaneous toll and capacity competition in a parallel-link network subject to congestion. We establish sufficient conditions for the existence of a pure-strategy oligopoly equilibrium and then derive upper bounds on the efficiency loss of the oligopoly equilibrium over the social optimum under different inverse demand function assumptions, respectively. Furthermore, we show that these bounds are demand-function free and only dependent upon the number of competitive roads.     

Global supply chain network dynamics with multicriteria decision-making under risk and uncertainty

In this paper, we consider the dynamics of a global supply chain network economy in the presence of risk and uncertainty in which distinct speeds of adjustment are included. We assume three tiers of decision-makers: manufacturers, distributors, and retailers, who acquire the product in order to satisfy the demand at the demand markets. The manufacturers, distributors, and retailers may be based in the same or in different countries and may transact in different currencies. We allow for electronic transactions in the form of electronic commerce between the manufacturers and the retailers as well as between the distributors and the retailers since the retailers may be physical or virtual. In addition, supply-side risk and demand-side risk are handled in our formulation with the former being expressed as a multicriteria decision-making problem for each manufacturer and distributor (with distinct weights associated with the criteria) and the latter being handled with the use of uncertain demands. The proposed framework allows for the modeling and theoretical analysis of such global supply chain networks, which involve competition within a tier of decision-makers but cooperation between tiers. Numerical examples are provided for illustrative purposes.     

Reprint of “Linking rival and stakeholder pressure to green supply management: Mediating role of top management support”

Drawing upon the Schumpeterian view of competition and stakeholder theory, the purpose of our study is to examine how issues of rivalry and stakeholder pressure motivate firms to implement green supply management practices. We also consider the role of top management support as an important enabler to how firms react to competitive pressures to pursue green supply management practices. Our model is tested using a sample of supply chain professionals. Our results indicate that environmental pressure from rivals and stakeholders influences green supply management implementation through the mediating role of top management support for environmental initiatives.     

Supply chain network competition in price and quality with multiple manufacturers and freight service providers

In this paper, we develop both static and dynamic supply chain network models with multiple manufacturers and freight service providers competing on price and quality. The manufacturers compete with one another in terms of price and quality of the product manufactured, whereas the freight service providers compete on price and quality of the transportation service they provide for multiple modes. Both manufacturers and freight service providers maximize their utilities (profits) while considering the consequences of the competitors’ prices and quality levels. Bounds on prices and quality levels are included that have relevant policy-related implications. The governing equilibrium conditions of the static model are formulated as a variational inequality problem. The underlying dynamics are then described, with the stationary point corresponding to the variational inequality solution. An algorithm which provides a discrete-time adjustment process and tracks the evolution of the quality levels and prices over time is proposed, and convergence results given. Numerical examples illustrate how such a supply chain network framework, which is relevant to products ranging from high value to low value ones, can be applied in practice.     

A multi-population genetic algorithm for transportation scheduling

This study considers the integration of production and transportation scheduling in a two-stage supply chain environment. The objective function minimizes the total tardiness and total deviations of assigned work loads of suppliers from their quotas. After modeling the problem as a mixed integer programming problem, a genetic algorithm with three populations, namely, a multi-society genetic algorithm (MSGA), is proposed for solving it. MSGA is compared with the optimum solutions for small problems and a heuristic and a random search approach for larger problems. Additionally, an MSGA is compared with a generic genetic algorithm. The experimental results show the superiority of the MSGA.     

A hybrid decomposition algorithm for designing a multi-modal transportation network under biomass supply uncertainty

This study presents a two-stage stochastic programming model for the design and management of a biomass co-firing supply chain network under feedstock supply uncertainty. To represent a more realistic case, we generate scenarios from prediction errors of the historical and forecasted biomass supply availabilities. We solve the model using a hybrid decomposition algorithm that combines Sample average approximation with an enhanced Progressive hedging algorithm. The proposed algorithm is validated via a real-world case study using data from Mississippi and Alabama. Computational results indicate that the proposed algorithm is capable of producing high quality solutions in a reasonable amount of time.     

Stochastic programming approach to re-designing a warehouse network under uncertainty

The warehouse network re-design problem includes integrating or eliminating existing warehouses and establishing new sites. In this paper, we incorporate variability in product demand and operational costs with a two-stage stochastic modeling approach. We use the Sample Average Approximation (SAA) approach together with Benders decomposition to provide a solution method. Our results indicate not only that the stochastic solution is an improvement over the deterministic solution but also that the solutions’ differences grow with increasing uncertainty. The stochastic solutions show more robustness than the deterministic solutions. The computational results show that a change in the type of probability distribution of the stochastic parameters does not significantly affect the value of the stochastic solutions.     

A supply chain-transport supernetwork equilibrium model with the behaviour of freight carriers

This paper presents a supernetwork equilibrium model integrating supply chain networks with a transport network, namely, a supply chain-transport supernetwork equilibrium model. The model takes into account the behaviour of freight carriers and transport network users to endogenously determine the transport costs generated in the supply chain networks. The interaction between transport network and supply chain networks can also be examined. Results of the numerical tests reveal that the improvement of transport network could enhance the efficiency of supply chain networks. The paper makes contributions to modelling of supply chain networks as well as to that of transport networks.     

Freight transport network design using particle swarm optimisation in supply chain–transport supernetwork equilibrium

This paper presents a discrete network design problem for optimally designing freight transport network in terms of the efficiency of supply chain. Modelling is undertaken within the framework of mathematical programmes with equilibrium constraints, which first incorporates both supply chain and transport networks explicitly. The upper level determines the best set of actions for transport network improvement, while the lower-level decision is based on a supply chain–multimodal transport supernetwork equilibrium. New variants of particle swarm optimisation are developed to approximately solve the upper level. Numerical tests reveal their superior performance and the effective freight transport-related actions.     

Integrated inventory-transportation model by synchronizing delivery and production cycles

This paper develops an integrated single-vendor multi-buyer inventory-transportation synchronized supply chain model. In this paper, the decisions of truck assignment and routing are also considered and as a result, a series of vehicle routing problems (VRP) are required to be solved. Due to the highly complicated objective function and the NP-hard VRP problems, the problem cannot be solved analytically. Hence, meta-heuristics are proposed. By means of the numerical examples and a case study, the meta-heuristics developed are shown to be very effective in solving such comprehensive supply chain models, and the results so obtained are promising.