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This paper aims to find operational decisions and financing strategies in a closed-loop supply chain (CLSC) consisting of a financially constrained manufacturer and a retailer. Based on a benchmark...

We develop an inventory model for perishable products with a two-period shelf-life. The demand during a stock out in either period is treated as lost sales. Besides the initial regular order, the manager also has an opportunity to adjust the mid-cycle inventory with either expedited order or returns. An expedited order plan allows the manager to place an emergency order if the mid-cycle leftover inventory is low, while a returns plan offers the manager a chance to return some units within the validity period to suppliers if the leftover inventory is high. We show that both adjustment plans have their own thresholds, which exhibit a similar policy to that in the classical newsvendor model. Due to the dynamics of inventory, we investigate how the regular order is affected by each adjustment plan. Our findings indicate that the expedited order plan has a better performance in controlling the wastage risk, but it results in a higher shortage risk than the returns plan. Considering the respective advantages of the two plans, we show the existence of a new plan that is the combination of the two and justify the motivation for the manager to use it in the perishable inventory management.

This paper develops supply chain game models with multiple uncertainties, and studies the impact of channel power on the efficiency of supply chain. Besides the regular production run, the manufacturer may choose the outsourcing mode due to his production disruption risk and uncertainty of capacity allocation. We find that the manufacturer has no incentive to outsource when both the disruption risk is low enough and his production capacity is large enough. When the disruption risk is sufficiently high, the manufacturer will fully outsource production regardless of the production capacity. There is a zone of order-difference outsourcing where the manufacturer just outsources the part in excess of the certain threshold value. Under the retailer-Stackelberg (RS) game, the manufacturer׳s order-difference outsourcing strategy can induce the retailer to order more items. Unlike RS, the retailer in the manufacturer-Stackelberg (MS) game always orders a quantity equal to that in the classic newsvendor model. Meanwhile, we find that the channel power does not affect the player’s decision except in the zone of order-difference outsourcing. Compared with MS, the dominant retailer can better deal with the uncertainties and make better use of demand information. From the channel׳s perspective, the two players have the different attitudes towards the risks. The dominant manufacturer prefers to forcibly offload production risks to his partner, while the dominant retailer in RS actively takes the partner׳s risks.

This paper considers a supply chain in which a buyer purchases finished items from a contracting supplier to satisfy a stochastic market demand, where the supplier’s production is subject to random yield. We assume that the buyer can make up the shortage by sourcing from an emergency backup supplier. We develop two Stackelberg game models, i.e. buyer-Stackelberg (BS) model and supplier-Stackelberg (SS) model, and find that the decentralised BS model results in a higher stocking factor of supplier’s input than the decentralised SS model. Compared with BS model, the buyer in SS model performs more explicit order plan, and we find that only when the actual yield of the supplier is insufficient, the buyer would use emergency backup sourcing to make up the shortage. When the manufacturing operation of the supplier is in the good state, the buyer only orders a certain amount and has some leftover. When the actual yield of the supplier is moderate, the buyer uses up every item produced from the supplier regardle...

This paper investigates the coordination mechanism for supply chain with one manufacturer and multiple competing suppliers in the electronic market. We first study two conventional price-only policies, including wholesale price policy and catalog policy, based on the reverse Vickrey auction, and show that both the buyer and the powerful suppliers (with production cost less than a special threshold value) prefer catalog policy to wholesale price policy, and the powerless suppliers prefer wholesale price policy to catalog policy. Simultaneously, neither policy can coordinate the channel composed of the manufacturer and the winning supplier. We also show that a quantity discount policy cannot coordinate the supply chain with competing suppliers unless a kind of restriction is imposed. The aim of the paper is to explore a coordination mechanism, i.e., the price-restricted quantity-discount policy. Pareto analysis indicates that the manufacturer and the winning supplier will realize the ‘win-win’ situation, and the channel can also be coordinated. A key managerial implication of our study is that additional restrictive condition may be necessary to eliminate system inefficiency. Some numerical examples are also given to illustrate management insights.

This paper develops two coordination models of a supply chain consisting of one manufacturer, one dominant retailer and multiple fringe retailers to investigate how to coordinate the supply chain after demand disruption. We consider two coordination schedules, linear quantity discount schedule and Groves wholesale price schedule. We find that, under the linear quantity discount schedule, the manufacturer only needs to adjust the maximum variable wholesale price after demand disruption. For each case of the disrupted amount of demand, the higher the market share of the dominant retailer, the lower its average wholesale price and the subsidy will be under the linear quantity discount schedule, while the higher its fraction of the supply chain's profit will be under Groves wholesale price schedule. When the increased amount of demand is very large and production cost is sufficiently low, linear quantity discount schedule is better for the manufacturer. However, when the production cost is sufficiently large, Groves wholesale price schedule is always better. We also find that the disrupted amount of demand largely affects the allocation of the supply chain's profit.

We develop a two-period game model of a one-manufacturer and one-retailer supply chain to investigate the optimal decisions of the players, where stock-out and holding costs are incorporated into the model. The demand at each period is stochastic and price sharply drops in mid-life. We assume the retailer has a single order opportunity, and decides how much inventory to keep in the middle of selling season. We show that both the price-protection mid-life and end-of-life returns (PME) scheme and the only mid-life and end-of-life returns (ME) scheme may achieve channel coordination and access a ‘win–win’ situation under some conditions. The larger the lowest expected profit of the retailer, the lower the possibility of ‘win–win’ situation will be. Combined with the analysis of feasible regions for coordination policies, we find that PME scheme is not always better than ME scheme from the perspective of implementable mechanism. Finally, we find that adopting the dispose-down-to (DDT) policy can bring a larger improvement of the expected channel profit in the centralized setting, and it is interesting that by using DDT policy, double marginalization occurs only at Period 1, and however, does not plague the retailer in Period 2.