Title: Optimum policies for dynamic supply chain management : competitive vs. cooperative view
Proceedings: Proceedings of the IPLnet 2005 Workshop
Conference details: IPLnet Workshop, Böttstein, 2005
Publisher / Ed. Institution : IPLnet
Issue Date: 2005
License (according to publishing contract) : Licence according to publishing contract
Type of review: Not specified
Language : English
Subjects : Supply chain; Optimization; Theory of games
Subject (DDC) : 658.5: Production management
Abstract: In this paper, we study a supplier-retailer supply chain under nonstationary stochastic demand. Depending on the logistics cost rates of the supply chain partners and their accounting schemes, there may be substantial differences between individually and collectively optimum inventory management policies. We propose transfer payments between the supply chain partners as a measure to eliminate incentives for departing from collectively optimum policies and thus make them incentive compatible. In case the supply chain faces changes in the demand pattern, demand forecasts are required for both stages for periodic updates of their strategy parameters. We propose a simple smoothing technique to obtain these forecasts. Both, transfer payments and the forecasting method combined, provide a method to manage a supply chain optimally with respect to three criteria. First, total operating costs are minimized, second, no member of the supply chain has incentives to deviate from collective optimality and third, the system is reactive to changes in demand patterns.
Departement: School of Engineering
Organisational Unit: Institute of Data Analysis and Process Design (IDP)
Publication type: Conference Paper
URI: https://digitalcollection.zhaw.ch/handle/11475/6091
Appears in Collections:Publikationen School of Engineering

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