Coordination and performance analysis for a three-echelon supply chain with a revenue sharing contract

This paper focuses on a three-echelon supply chain composed of a manufacturer, a distributor and a retailer for a single selling period. Based on a revenue sharing contract, the coordination of the decentralised supply chain with the simultaneous move game or the leader–follower game is analysed. It is determined that the revenue sharing contract can coordinate the decentralised supply chain with the simultaneous move game. Our analysis reveals that the revenue sharing contract cannot coordinate the decentralised three-echelon supply chain with the leader–follower game except for a special situation. However, this result provides an opportunity to develop methodology and results that measure the potential improvement in supply chain performance that can be gained from utilising the revenue sharing contract. This is an important aspect of this paper.     

Development of a hybrid fresh food supply chain risk assessment model

Supply chain managers and scholars recognise the importance of managing supply chain risk, especially in fresh food supply chain due to the perishable nature and short life cycle of products. Supply chain risk management consists of supply chain risk assessment, risk evaluation and formulation and implementation of effective risk response strategies. The commonly adopted qualitative methods such as risk assessment matrix to determine the level of risk have limitations. This paper proposes a hybrid model comprising both fuzzy logic (FL) and hierarchical holographic modelling (HHM) techniques where risk is first identified by the HHM method and then assessed using both qualitative risk assessment model (named risk filtering, ranking and management Framework) and fuzzy-based risk assessment method (named FL approach). The risk assessment results by the two different approaches are compared, and the overall risk level of each risk is calculated using the Root Mean Square calculation before identifying response strategies. This novel approach takes advantage of the benefits of both techniques and offsets their drawbacks in certain aspects. A case study in a fresh food supply chain company has been conducted in order to validate the proposed integrated approach on the feasibility of its functionality in a real environment.     

A reliable decision support system for fresh food supply chain management

The paper proposes a decision support system (DSS) for the supply chain of packaged fresh and highly perishable products. The DSS combines a unique tool for sales forecasting with order planning which includes an individual model selection system equipped with ARIMA, ARIMAX and transfer function forecasting model families, the latter two accounting for the impact of prices. Forecasting model parameters are chosen via two alternative tuning algorithms: a two-step statistical analysis, and a sequential parameter optimisation framework for automatic parameter tuning. The DSS selects the model to apply according to user-defined performance criteria. Then, it considers sales forecasting as a proxy of expected demand and uses it as input for a multi-objective optimisation algorithm that defines a set of non-dominated order proposals with respect to outdating, shortage, freshness of products and residual stock. A set of real data and a benchmark – based on the methods already in use – are employed to evaluate the performance of the proposed DSS. The analysis of different configurations shows that the DSS is suitable for the problem under investigation; in particular, the DSS ensures acceptable forecasting errors and proper computational effort, providing order plans with associated satisfactory performances.     

Simulation modelling for food supply chain redesign; integrated decision making on product quality,sustainability and logistics

Food supply chains are confronted with increased consumer demands on food quality and sustainability. When redesigning these chains the analysis of food quality change and environmental load of new scenarios is as important as the analysis of efficiency and responsiveness requirements. Simulation tools are often used for supporting decision-making on supply chain (re)design when logistic uncertainties are in place, building on their inherent modelling flexibility. Mostly, the underlying assumption is that product quality is not influenced by or does not influence chain design. Clearly, this is not true for food supply chains, as quality change is intrinsic to the industry. We propose a new integrated approach towards logistics, sustainability and food quality analysis, and implement the approach by introducing a new simulation environment, ALADIN?. It embeds food quality change models and sustainability indicators in discrete event simulation models. A case example illustrates the benefits of its use relating to speed and quality of integrated decision making, but also to creativity in terms of alternative solutions.     

Modelling of sustainable food grain supply chain distribution system: a bi-objective approach

Growing food demand, environmental degradation, post-harvest losses and the dearth of resources encourage the decision makers from developing nations to integrate the economic and environmental aspects in food supply chain network design. This paper aims to develop a bi-objective decision support model for sustainable food grain supply chain considering an entire network of procurement centres, central, state and district level warehouses, and fair price shops. The model seeks to minimise the cost and carbon dioxide emission simultaneously. The model covers several problem peculiarities such as multi-echelon, multi-period, multi-modal transportation, multiple sourcing and distribution, emission caused due to various motives, heterogeneous capacitated vehicles and limited availability, and capacitated warehouses. Multiple realistic problem instances are solved using the two Pareto based multi-objective algorithms. Sensitivity analysis results imply that the decision makers should establish a sufficient number of warehouses in each producing and consuming states by maintaining the suitable balance between the two objectives. Various policymakers like Food Corporation of India, logistics providers and state government agencies will be benefited from this research study.     

Internal incentives and operations strategies for the water-saving supply chain with cap-and-trade regulation

Faced with the rapid development of modern industries of agriculture, manufacturing, and services, water resources are becoming increasingly scarce. Industries with high water consumption are generally regulated by the government’s water cap-and-trade (CAT) regulation to solve the contradiction between the limited water supply and the rapid growing water demand. Supply chain equilibrium and coordination models under the benchmark scenario without water saving and CAT regulation, water-saving supply chain equilibrium and coordination models under the scenario without/with CAT regulation are developed, analyzed and compared. The corresponding numerical and sensitivity analyses for all models are conducted and compared, and the managerial insights and policy recommendations are summarized in this article. The results indicate that (1) Conducting water saving could improve effectively the operational performance of the water-saving supply chain under the scenario without/with CAT regulation. (2) The coordination strategy based on the revenue sharing contract could efficiently coordinate the water-saving supply chain, enhance water consumption reduction rate, and improve the operational performance of the water-saving supply chain. (3) The implementation of CAT regulation enhances effectively water-consumption-reduction in the water-saving supply chain and improves the operational performance of water-saving supply chain. (4) Simultaneous implementation of CAT regulation by the government and adopting coordination strategy by the water-saving supply chain would be superior to any other scenarios/strategies. (5) A suitable water cap based on the industrial average water consumption and historical water consumption data are beneficial for constructing reasonable and effective incentive mechanism. (6) A higher marginal trade price could induce more reduction in water consumption and create better operational performance for the manufacturer and water-saving supply chain, both under the equilibrium and coordination strategies.     

Service capability procurement decision in logistics service supply chain: a research under demand updating and quality guarantee

Though existing researches have already studied on service quality guarantee and demand updating in a supply chain respectively, there is little attention paid to integrated research on service quality guarantee problem with demand updating. This paper aims to investigate the impacts of demand uncertainty revelation and quality guarantee change cost (GCC) on the optimal decisions of logistics service integrator (LSI) and functional logistics service provider (FLSP) in a logistics service supply chain. At the beginning of the first period, the FLSP first guarantees an initial quality level and the LSI procures service capacity from the FLSP based on the demand prediction. Then the demand information is updated after the first-period demand being satisfied, and the LSI and the FLSP make their optimal decisions based on the renewed demand in the next period. Before the second period, uncertainty complete revelation/uncertainty incomplete revelation (UCR/UIR) and GCC/no guarantee change cost (NGCC) may take place, which will affect the decisions the LSI and the FLSP make. Consequently, four situations are considered: (1) UCR and GCC; (2) UIR and GCC; (3) UCR and NGCC; and (4) UIR and NGCC. In each situation, we derive the optimal decisions of the FLSP and the LSI, and a comparison between the first- and second-period decisions in each situation is conducted. Several managerial insights are concluded, and the most important one is that the LSI is supposed to reduce the procurement quantity and the FLSP is supposed to promise a higher quality defect rate in the case of UIR and NGCC. Furthermore, in case of UIR and GCC, we specify a critical condition in which the LSI and the FLSP insist on the initial decisions of the first period. At last, we conducted numerical analysis and gave a practical example of China Yuantong Express Company to support our conclusions.     

Coordinating a supply chain under demand and cost disruptions

In this paper, we investigate the coordination of a supply chain consisting of one manufacturer and n Bertrand competing retailers under disruptions of market demand and production cost. We present a coordination model of a supply chain under normal scenarios. Our findings demonstrate that the coordination scheme designed for the initial production plan should be revised when disruptions of market demand and production cost occur. To resolve this issue, we consider the possible deviation costs caused by disruptions and propose optimal decision models for different disruptions under centralised decision-making. We present an improved revenue-sharing contract model to coordinate the decentralised supply chain under disruptions. The proposed models are then further analysed through numerical examples.     

Recent advances and opportunities in sustainable food supply chain: a model-oriented review

Faced with the challenges associated with sustainably feeding the world’s growing population, the food industry is increasingly relying on operations research (OR) techniques to achieve economic, environmental and social sustainability. It is therefore important to understand the context-specific model-oriented applications of OR techniques in the sustainable food supply chain (SFSC) domain. While existing food supply chain reviews provide an excellent basis for this process, the explicit consideration of sustainability from a model-oriented perspective along with a structured outline of relevant SFSC research techniques are missing in extant literature. We attempt to fill this gap by reviewing 83 related scientific journal publications that utilise mathematical modelling techniques to address issues in SFSC. To this end, we first identify the salient dimensions that include economic, environmental and social issues in SFSC. We then review the models and methods that use these dimensions to solve issues that arise in SFSC. We identify some of the main challenges in analytical modelling of SFSC as well as future research directions.     

Competition and cooperation in a supply chain with an offline showroom under asymmetric information

Offline showrooms develop rapidly to resolve consumers’ uncertainty about whether products fit their needs when they purchase online. This paper considers a supply chain where an offline showroom provides experience service for an existing online retailer and intends to introduce a new competing online retailer to satisfy consumers’ heterogeneous demand. The offline showroom has better knowledge of demand information due to closer to offline consumers. We examine the impact of competition and the offline showroom's optimal channel cooperation strategy under asymmetric information and analyse the equilibrium results under the optimal strategy to shed light on channel cooperation and information strategy for supply chain members. We find that under asymmetric information competition prompts the offline showroom to conceal information which generates signal cost (negative information effect) and to increase experience service level which creates value (positive service effect). The optimal channel cooperation strategy depends on the trade-off between these effects. We also find that competition increases the existing online retailer's profit in some conditions. Besides, in some conditions information asymmetry harms all supply chain members, which suggests the offline showroom to share information with the online retailers; in some conditions, information asymmetry harms the offline showroom but benefits the online retailers.     

Pricing and ordering decisions in a supply chain with imperfect quality items and inspection under buyback of defective items

In this article, the economic production and inventory model in a three-layer supply chain including one distributor, one manufacturer and one retailer for a single-product and general demand functions under three scenarios is developed. We assume that during the production process, both healthy and defective items are generated. As the first scenario, we develop the first model, in which the defective items are not reworked and all considered as scrape, while in the second model, we assume that the defective items are reworked and are sold as perfect item. In the second scenario, we assume that defective item can be sold with lower price than the selling price. Moreover, raw materials with imperfect quality are sent back from a distributor to outside supplier under a lower price. Determining the order quantity of the distributor and the selling prices of the distributor and the manufacturer as well as the retailer was the goal of this article such that the total profit of each member is maximised. In order to solve the models, the Stackelberg approach is employed between the members, and the concavity of the profit functions is proved using several theorems. Then, closed form solutions are derived for the decision variables and a solution algorithm is proposed to determine the optimal solutions. Finally, a numerical example is presented to illustrate the applicability of the model.