Mitigating the risk of information leakage in a two-level supply chain through optimal supplier selection

Zhang, Da Yong; Cao, Xinlin; Wang, Lingyu; Zeng, Yong

doi:10.1007/s10845-011-0527-3

Cited by 46 publications

(23 citation statements)

References 55 publications

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“…The supplier's incentive to prevent information leakage is that they could yield higher profit for the supplier depending on their economies of scale. Zhang et al (2012) take a different approach to resolve the information leakage problem. Rather than focusing on the contracts between the parties, they investigate the dynamics that cause the problem.…”

Section: Literature Reviewmentioning

confidence: 99%

Recycling procurement strategies with variable yield suppliers

Rowe

Ekşioğlu

2015

Ann Oper Res

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Companies are no longer judged on financial performance alone, but rather on their "Triple-Bottom Line", which accounts for social and environmental measures as well. This leads companies to investigate the sustainability of their operations and their products. Between the increasing cost of virgin raw materials and customers demanding post-consumer product content, manufacturers have begun looking at recycled material options. This paper addresses a procurement issue facing a polystyrene packaging manufacturer considering its optimal purchasing strategies between two suppliers -one providing virgin material, the other offering recycled material. A single-period scenario is modeled where each supplier sells product with a known yield distribution at market pricing. The manufacturer must choose whether to sole-source or dual-source, as well as determine how much material to purchase from each supplier to meet deterministic demand. Our results indicate that there is a range of prices from the recycled material supplier where dual-sourcing will lead to higher manufacturer profits compared to solesourcing. We show, based on the procurement strategy, the optimal quantities to purchase to maximize manufacturer's expected profit.We then investigate the area of supplier development and how the manufacturer can improve their expected profit by investing in their supplier's quality improvement effort. The questions addressed are how much the manufacturer would be willing to invest and how they ensure the proper return on their investment. This paper determines the expected increase in profit for the manufacturer from yield improvement projects at a supplier, which therefore becomes the upper threshold for investment. We also find that a company can err in their project acceptance criteria if they have an approval process that views project acceptance myopically rather than holistically.Lastly, we develop a systematic and comprehensive approach to the supplier selection process. We utilize the fundamental concepts behind W. Edwards Deming's Plan-Do-Study-Act improvement cycle and apply them to the supplier selection process.We also present analytic and numerical study results that can be used in conjunction with contractual mechanisms to not only overcome issues such as free riding, but to also incentivize suppliers to engage in supplier development projects they may not have otherwise undertaken. In order to understand why companies have become more attentive to the issue of recycling, one must look back over the past few decades. Firms have faced increased scrutiny on the environmental impact surrounding the disposal of consumer goods, the disposition of production by-products, and how they act as corporate citizens. No longer are companies judged solely on their financial measurements. They are now being evaluated on the "Triple Bottom Line". This metric measures a firm's social and environmental performance, as well as its economic performance. Manufacturers must 2 now address how their products impact the environment...

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Section: Literature Reviewmentioning

confidence: 99%

Recycling procurement strategies with variable yield suppliers

Rowe

Ekşioğlu

2015

Ann Oper Res

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“…Hallikas et al [98] focused the risks on supplier relationships and networks, Neiger et al [99] determined process-based risks in supply chain based on Value-Focused Process Engineering (VFPE), Kleindorfer et al [100] concentrated on the disruption risks in supply chain. However, Zhang et al [101] stated that current research ignore general risk sources that affect supply chains in a less visible manner, such as information leakage. According to such analysis, Sun et al [10] identified the risks of information leakage in collaborative design chain environment.…”

Section: Risk Managementmentioning

confidence: 99%

“…Khan et al [106] addressed the importance of the impact of product design on supply chain risk based on an in-depth longitudinal case study of a major UK retailer. For the purpose of intellectual property protection, Zhang et al [101] mitigated the risk of confidential information leakage through optimal supplier selection.…”

Section: Risk Managementmentioning

confidence: 99%

Secure collaboration in global design and supply chain environment: Problem analysis and literature review

Zeng

Wang

Deng

et al. 2012

Computers in Industry

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“…was considered by Gürler and Parlar (1997). Zhang et al (2011) presented the model that aims to evaluate and mitigate the risk of information leakage. First, we formulate the problem of information leakage caused by inferences in a two-level supply chain where potential competition may exist between a supplier and the manufacturer.…”

Section: Introduction and Literature Reviewmentioning

confidence: 99%

A new newsvendor policy model for dual-sourcing supply chains by considering disruption risk and special order

2015

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Newsvendor model is one of the most important issues in inventory models. In this paper, we investigate a newsvendor model without lead time, which have difference between distributer and wholesale/retailer. At the end of day, the residual products of newsvendor sold to a secondary market at a unit salvage value. Also, the amount of orders that cannot be met, should be paid the penalty for each unit. In addition, in each one of channels, the percent of these orders cannot be met by the distributer. Then, the newsvendor provides the difference between the amount that ordered to distributor and the amount that met in the occurrence of interruptions risk as a special order from the manufacturer, more expensive than the price of distributor. The limitations of the study are the procurement budget that used for special order. Finally, the model is applied in a real case as a numerical example to determine order amount that maximize profit and is solved by Maple 15. The Kuhn-Tucker method was used to illustrate the optimal points that have necessary condition. Also, the hessian matrix was used to illustrate the optimal points that have sufficient condition for optimization. Consequently, the considered points are global optimum. The main factor in the disruption risk that effect on the ordering amount and profit, are including the probability of appearing of disruption ( p i ) and a percent of ordering amount which are met in the case of appearing of disruption (y i ). Therefore, the analysis of sensitivity has been done B Seyed Hamid Reza Pasandideh on two parameters of p i and y i by using contour curves. According to result of solved problem, the change of disruption appearance reduced. Finally, the proposed method besides being simple is so exact which is sensible in the solved problems.

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Mitigating the risk of information leakage in a two-level supply chain through optimal supplier selection

Cited by 46 publications

References 55 publications

Recycling procurement strategies with variable yield suppliers

Recycling procurement strategies with variable yield suppliers

Secure collaboration in global design and supply chain environment: Problem analysis and literature review

A new newsvendor policy model for dual-sourcing supply chains by considering disruption risk and special order

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