Comparing different coordination scenarios in a three-level supply chain system |
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Authors: | Siraj K Zahran Mohamad Y Jaber Simone Zanoni |
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Affiliation: | 1. Department of Mechanical and Industrial Engineering, Ryerson University, Toronto, Canada;2. Department of Mechanical and Industrial Engineering, Università degli Studi di Brescia, Brescia, Italy |
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Abstract: | The consignment stock (CS) policy, independently or coupled with vendor managed inventory (VMI), has been practised by businesses and shown to be profitable. It helps to reduce or eliminate out-of-stock instances caused by fluctuations in demand. CS brings several benefits to collaborating parties. Unlike the two-level supply chain models in the literature, this paper considers a three-level supply chain that consists of a supplier, a vendor and a buyer with CS policy agreements. The paper also examines four coordination scenarios (a combination of traditional and CS) in conjunction with a payment scheme between adjacent parties. Nine coordination cases (models) are provided. A sensitivity analysis is performed to study the effects of some parameters on the performance of the developed models. Most of the results showed that a combination of traditional and CS policies returned a higher total system profit. |
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Keywords: | supply chain management three-level supply chain coordination mechanism consignment stock traditional policy payment scheme |
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