Supply Chain Coordination Based on Buy-Back Contract under Price-Sensitive and Time-Sensitive Demand

Shen, Chenglin; Zhang, Xinxin

doi:10.1007/978-3-642-29452-5_50

Cited by 1 publication

(1 citation statement)

References 7 publications

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“…This stream of SCC literature uses some incentives in the form of contracts to achieve coordination among supply chain members. Some of these incentives include buy-back contracts (Padmanabhan and Png 1997;Hou et al 2010;Shen and Zhang 2012;Tibrewala et al 2018), revenue sharing contract (Giannoccaro and Pontrandolfo 2004;Cachon and Lariviere 2005), service levelbased contracts (Sieke et al 2012), discount policy (Xu et al 2018a;Nouri et al 2018), credit period (delay in payment) (Ebrahimi et al 2019), bi-level credit period (Johari et al 2018). The readers may refer to Cachon (2003) for comprehensive information about the structure of coordinating contracts.…”

Section: Supply Chain Coordination (Scc)mentioning

confidence: 99%

A joint inventory–finance model for coordinating a capital-constrained supply chain with financing limitations

2021

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Faced with economic recession, firms struggle to find ways to stay competitive and maintain market share. Effective coordination of the supply chain can solve this problem, but this may fail if existing capital constraints and financial flows are ignored. This study addresses the challenge by exploiting coordination through joint decision-making on the physical and financial flows of a capital-constrained supply chain. We also consider the capital-constrained member’s financing limitations that lead to lost sales. Two scenarios based on non-coordinated and coordinated structures are modeled in the form of bi-objective optimization problems that simultaneously optimize system costs and service levels. The models are solved using the $$\varepsilon$$ ε -constraint method. The results indicate that the non-coordinated model cannot satisfy more than about 50% of the demand due to capital shortage and financing limitations, while the coordinated model can satisfy all of the demand via internal financing. Furthermore, the proposed coordination scheme leads to cost reduction for the members and the total system. To motivate all members to accept the proposed coordination scheme, a cost-sharing mechanism is applied to the coordination procedure. Finally, a sensitivity analysis concerning financial parameters is provided for validating the coordination model.

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