Modeling of Purchase and Sales Contracts in Supply Chain Optimization

Park, Minhwan; Park, Sunwon; Grossmann, Ignacio E.

doi:10.1021/ie0513144

Cited by 37 publications

(10 citation statements)

References 17 publications

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“…Note that our strategy in this setting is a non zero-sum game since utilizing manufacturers' investment; both will gain profit regardless of the imposed strategy. Previous studies categorized and defined the relationships among partners in the supply chain in different ways [37][38][39][40]. In this study, for the first time, we adopt these four types of relationship based on game theory in the background of supplier development from a dynamic investment perspective.…”

Section: Settingsmentioning

confidence: 99%

Numeric Evaluation of Game-Theoretic Collaboration Modes in Supplier Development

Dastyar

Pannek

2019

Applied Sciences

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To deal with increasingly competitive challenges, today’s companies consider supplier performance as a crucial factor to their competitive advantage. Supplier development is one of the recent approaches to supplier performance enhancement and consistently requires relationship-specific investments. It is important to invest money, experts and/or machines in a supplier to minimize the risk of an inefficient supply chain while maximizing the level of profitability. This paper provides the number of optimization models to confront this issue utilizing Model Predictive Control. We consider a centralized and distributed setting with two manufacturers and one supplier, which enables us to simulate more realistic scenarios. We implement cooperative and non-cooperative scenarios to assess their impact on the manufacturers’ revenue. Results reveal that the cooperative setting between manufacturers pays off better than non-cooperative and collaborative settings in long-term investments. However, for short-term investments, the non-cooperative setting performs better than the others. We can conclude that, in short-term supplier development investments, an added value is generated since both the manufacturers and the supplier gain flexibility, therefore, investing separately can end up with higher profit for both manufacturers.

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Section: Settingsmentioning

confidence: 99%

Numeric Evaluation of Game-Theoretic Collaboration Modes in Supplier Development

Dastyar

Pannek

2019

Applied Sciences

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“…Benevolence [6,[25][26][27][28] Ability [28][29][30] Honesty [8,28,[31][32][33][34][35] Capability [3,[36][37][38] Opportunism [3,[38][39][40][41] Asset specificity [3,42,43] Commitment [3,36,37,40,44,45] Incentive alignment [3,41,[46][47][48] Information sharing [3,37,43,45,49,50] Bargaining power [43,44,47,48] Communication [3,46,51] Satisfaction with know-how/specialties…”

Section: Dynamic Factors Static Factorsmentioning

confidence: 99%

A Numerical Study on the Effects of Trust in Supplier Development

et al. 2020

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Supplier development constitutes one of the current tools to enhance supply chain performance. While most literature in this context focuses on the relationship between manufacturers and suppliers, supplier development also provides an opportunity for distinct manufacturers to collaborate in enhancing a joint supplier. This article proposes a model for the optimization of such joint supplier development programs, which incorporates the effects of trust in the manufacturer-to-manufacturer relationship. This article uses a model-predictive formulation to obtain optimal supplier development investment decisions to consider the strong dynamics of the markets. Thereby, the model is designed to be highly customizable to the needs and requirements of different companies. We analyzed the price development related to Mercedes’ A-Class cars and the cost development in the automotive sector over the last ten years in Germany. According to the obtained result, the proposed model shows a sensible behavior in including trust and its effects in supplier development, even when just applying a set of generalized rules. Moreover, the numeric experiments showed that aiming for a balanced mix of optimizing revenue and trust results in the highest revenue obtained by each partner.

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“…Supply and sales contracts have been modelled in Park et al (2006), who consider the following types of contracts:…”

Section: Modeling Of Strategic Decisionsmentioning

confidence: 99%

Perspectives in multilevel decision-making in the process industry

Brunaud¹,

Grossmann²

2017

Front. Eng

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Decisions in supply chains are hierarchically organized. Strategic decisions involve the long-term planning of the structure of the supply chain network. Tactical decisions are mid-term plans to allocate the production and distribution of materials, while operational decisions are related to the daily planning of the execution of manufacturing operations. These planning processes are conducted independently with minimal exchange of information between them. Achieving a better coordination between these processes allows companies to capture benefits that are currently out of their reach and improve the communication among their functional areas. We propose a network representation for the multilevel decision structure and analyze the components that are involved in finding integrated solutions that maximize the sum of the benefits of all nodes of the decision network. Although such task is very challenging, significant research progress has been made in each component of this structure. An overview of strategic models, mid-term planning models, and scheduling models is presented to address the solution of each node in the decision network. Coordination mechanisms for converging the integrated solutions are also analyzed, including solving large-scale models, multiobjective optimization, bi-level programming, and decomposition. We conclude by summarizing the challenges that hinder the full integration of multilevel decision making in supply chain management.

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Modeling of Purchase and Sales Contracts in Supply Chain Optimization

Cited by 37 publications

References 17 publications

Numeric Evaluation of Game-Theoretic Collaboration Modes in Supplier Development

Numeric Evaluation of Game-Theoretic Collaboration Modes in Supplier Development

A Numerical Study on the Effects of Trust in Supplier Development

Perspectives in multilevel decision-making in the process industry

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