Volume 55, 2021Regular articles published in advance of the transition of the journal to Subscribe to Open (S2O). Free supplement sponsored by the Fonds National pour la Science Ouverte
|Page(s)||S1789 - S1802|
|Published online||02 March 2021|
Coordinating a decentralized supply chain with capacity cost compensation
School of Management, University of Science and Technology of China, #96 JinZhai Road, Baohe District, Hefei, Anhui 230026, P.R. China
2 Hunan Key Laboratory of Macroeconomic Big Data Mining and its Application, School of Business, Hunan Normal University, Changsha, Hunan 410081, P.R. China
* Corresponding author: firstname.lastname@example.org
Accepted: 19 May 2020
Capacity planning, as a vital asset, is a challenge problem for firms in various industries, such as organic agriculture, apparels and high-tech industry. However, many manufacturers are conservative about their capacity investment for a variety of reasons. As a result, many retailers have the motivation to stimulate manufacturers to enhance the capacity level. In this paper, we propose a revenue sharing and capacity cost compensation contract to help the retailer stimulate her manufacturer to increase the capacity level. In the contract, the retailer keeps a portion of sales revenue and compensates for the manufacturer’s capacity cost. They face a stochastic demand and play a Stackelberg game where the retailer acts as a leader and the manufacturer acts as a follower. We prove that the channel can be perfectly coordinated through our proposed contract. Moreover, we give a feasible range of profit distribution, in which both channel members can earn no less profit than that in non-cooperation. Meanwhile, comparing with centralized channel with multiplicative demand, we find that capacity in decentralized channel tends to be lower.
Mathematics Subject Classification: 90Bxx / 91Axx
Key words: Supply chain management / capacity compensation / cooperative game / coordination mechanism
© EDP Sciences, ROADEF, SMAI 2021
Current usage metrics show cumulative count of Article Views (full-text article views including HTML views, PDF and ePub downloads, according to the available data) and Abstracts Views on Vision4Press platform.
Data correspond to usage on the plateform after 2015. The current usage metrics is available 48-96 hours after online publication and is updated daily on week days.
Initial download of the metrics may take a while.