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Coordinating a Supply Chain When Manufacturer Makes Cost Reduction Investment in Supplier
Joint Authors
Huang, Shilei
Fu, Hong
Ma, Yongkai
Source
Discrete Dynamics in Nature and Society
Issue
Vol. 2016, Issue 2016 (31 Dec. 2016), pp.1-8, 8 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2016-06-07
Country of Publication
Egypt
No. of Pages
8
Main Subjects
Abstract EN
We consider a supply chain consisting of an upstream supplier and a downstream manufacturer, in which the supplier provides a component to the manufacturer, facing a price-sensitive and uncertain demand.
The manufacturer makes cost reduction investment in the supplier to improve the supplier’s production efficiency, which benefits the entire supply chain.
We derive the optimal investment and operating decisions.
Both the centralized and decentralized supply chains are studied.
We show that the optimal investment and operating decisions in the decentralized setting may deviate from that in the centralized setting.
To avoid the profit loss caused by such a deviation, we develop a coordination mechanism by introducing a combined policy of revenue-sharing policy and investment cost-sharing policy.
We also show that the developed coordination mechanism can achieve Pareto improvement for the two players.
American Psychological Association (APA)
Huang, Shilei& Fu, Hong& Ma, Yongkai. 2016. Coordinating a Supply Chain When Manufacturer Makes Cost Reduction Investment in Supplier. Discrete Dynamics in Nature and Society،Vol. 2016, no. 2016, pp.1-8.
https://search.emarefa.net/detail/BIM-1103459
Modern Language Association (MLA)
Huang, Shilei…[et al.]. Coordinating a Supply Chain When Manufacturer Makes Cost Reduction Investment in Supplier. Discrete Dynamics in Nature and Society No. 2016 (2016), pp.1-8.
https://search.emarefa.net/detail/BIM-1103459
American Medical Association (AMA)
Huang, Shilei& Fu, Hong& Ma, Yongkai. Coordinating a Supply Chain When Manufacturer Makes Cost Reduction Investment in Supplier. Discrete Dynamics in Nature and Society. 2016. Vol. 2016, no. 2016, pp.1-8.
https://search.emarefa.net/detail/BIM-1103459
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1103459