• Journal of Distribution Science
• /
• v.15 no.8
• /
• pp.15-28
• /
• 2017

Purpose - Many researchers analyze VMI as a supply chain collaboration program to reveal its true value. Most of them focus on the dyadic relationship in two stage supply chain systems. This study examines the effect of VMI when it is applied to the different parts of three stage supply chain systems. Research design, data, and methodology - Based on three stage supply chain, this study compares three different systems including full VMI, partial VMI, and non-VMI by using mathematical models. The performances of three systems are compared with the numerical examples of the proposed supply chain models. Results - The numerical examples reveal that full VMI where the manufacturer controls inventories at all stages outperforms any other systems in terms of the system profit and enables all individual members to gain greater profits than non-VMI. Meanwhile, under partial VMI where VMI is implemented between the wholesaler and retailer, only these two members improve their performances and the manufacturer who does not belong to VMI makes less profit than even under non-VMI. This study also examines the impact of market size and profit margin on the system performance. Conclusions - The result of this study supports the common belief that VMI secures the best result when it is applied to the entire supply chain system. The additional findings from the numerical analysis are discussed.

• Journal of Distribution Science
• /
• v.22 no.1
• /
• pp.95-103
• /
• 2024

Purpose: Focusing on the complex supply chain operations beyond the simple dyadic relationship, this study evaluates the performance of the revenue sharing contract in three stage supply chain system. Research design, data, and methodology: The optimization model is developed to describe the supply chain system where one manufacturer, one wholesaler, and one retailer exist and pursue the maximum level of their own profits. In the numerical examples of the proposed supply chain model, two types of the revenue sharing contract, pairwise and spanning methods, are tested and their performances are compared with the traditional system. Results: The numerical analysis reveals that both types of the revenue sharing contract outperform the traditional system. All supply chain members can achieve the improved profits only when they determine the proper combination of revenue share ratios and price discount rates. Conclusions: This study finds out that both pairwise and spanning revenue sharing contracts can make the positive outcome that is acceptable to all members in three stage supply chain system. When the proper contract content is agreed among the supply chain members, the revenue sharing contract has the potential to be the practically feasible collaboration program for the multiple stage supply chain system.

• Journal of Distribution Science
• /
• v.20 no.6
• /
• pp.125-135
• /
• 2022

Purpose: The revenue sharing contract has been used in various industries and it is expected to coordinate the individual companies' operations in a way to improve the whole supply chain performance. This study evaluates the performance of the revenue sharing contract to find out whether this contract achieves its original goal, the supply chain coordination. Research design, data, and methodology: The profit optimization models are developed to represent two stage supply chain system with a supplier and a buyer. By using the numerical examples of the proposed mathematical models, this study examines whether this supply chain contract coordinates the supply chain system. Results: The numerical examples show that the revenue sharing contract does not make the same supply chain profit as the centralized system does. With the proper combination of the wholesale price discount rate and revenue share ratio, both manufacturer and retailer can obtain increased profits from the revenue sharing contract. Conclusions: The outcomes of the numerical analysis imply that the revenue sharing certainly improves the supply chain performance but it does not fully coordinate the supply chain system. By controlling the wholesale price and revenue share ratio, every supply chain member can be beneficiaries of this supply chain contract.

• IE interfaces
• /
• v.22 no.4
• /
• pp.368-375
• /
• 2009

This paper considers a two-stage supply system consisting of two make-to-stock facilities. The facility in the first stage produces a single type of component in anticipation of future demands from the market and the end item production while the facility in the second stage produces the end item in anticipation of future demands from the OEM customers. The facility in the first stage has the option of to accept or reject each incoming demand from the market. In this paper, we address the problem of how to control the exogenous component demand and how to manage the production of the end item and the component so as to maximize the system's profit subject to the system costs. In this paper, we present a heuristic policy that is the base-stock production policy combined with a linear switching curve for component demand control. Numerical study is implemented under different operating conditions of the system and it shows that the performance of the heuristic is very promising compared to that of the optimal policy for the Markov model.

• Journal of Distribution Science
• /
• v.14 no.4
• /
• pp.21-31
• /
• 2016

Purpose - This study examines how consignment and Vendor-Managed Inventory perform as supply chain collaboration programs. By using three key collaborative features, this study defines the collaboration programs and develops theoretical models of different supply chain systems. Research design, data and methodology - This study conducts sophisticated analysis on the supply chain systems by applying simulation modeling based on time-phased operations. The simulation model represents a two-stage supply chain system where a supplier sells a single item to a buyer, and it incorporates various operations. Results - In general, the simulation outcomes support that more advanced collaboration programs outperform less advanced ones. The analysis on the simulation outcomes identifies the significant value of information sharing in both collaboration programs. The specific conditions where the particular collaboration system outperforms the others are recognized. Conclusions - The outcome of this study supports that the supply chain system can improve its performance by having more collaborative features. This study provides business practitioners with guidelines to identify the circumstances that the specific collaboration program can fully exploit its advantages.

• The Journal of Industrial Distribution & Business
• /
• v.12 no.5
• /
• pp.7-16
• /
• 2021

Purpose: This study intends to examine how VMI with consignment performs over time and find out its on-going impacts on the individual supply chain member's achievement. Research design, data, and methodology: This study formulates the mathematical model that represents two-stage supply chain system. By analyzing the numerical examples, this study compares VMI with consignment with the traditional system. Results: VMI with consignment eventually makes higher supply chain profit than the traditional system, even though it's early performance is poor. The influence of VMI with consignment on the performance of the supply chain member is distinct depending on the individual member and time. The consignment may not be helpful to increase the system profit, but it reduces the manufacturer's burden of costs. Conclusions: VMI with consignment improves the supply chain performance after all, and it still takes times until its benefit becomes fully realized. To be a successful collaboration program, VMI with consignment requires a carefully designed incentive scheme that provides the timely compensation to the individual supply chain members. This study also finds out that the consignment contract of this collaboration program plays a role of financially supporting the manufacturer at the early stage of its implementation.

• Journal of Korean Society of Industrial and Systems Engineering
• /
• v.32 no.1
• /
• pp.117-129
• /
• 2009

The bullwhip effect is known as the significant factor which causes unnecessary inventory, lost sales or cost increase in supply chains. Therefore, the causes of the bullwhip effect must be examined and removed. In this paper, we develop two analytical tools for the bullwhip effect control in supply chains. First, we develop the quantitative models for computing the bullwhip effect in a three-stage supply chain consisted of a single retailer, a single distributor and a single manufacturer when the fixed-interval replenishment policy is applied at each stage. The quantitative models are developed under the different conditions for the demand forecasting and share of customer demand information. They are validated through the computational experiments. Second, we develop a simulation-based decision support system for the bullwhip effect control in a more diverse dynamic supply chain environment. The system includes a what-if analysis function to examine the effects of varying input parameters such as operating policies and costs on the bullwhip effect.

• Journal of Distribution Science
• /
• v.17 no.7
• /
• pp.87-98
• /
• 2019

Purpose - The goal of this research is to examine the influence of Quick Response on the supply chain performance. Furthermore, this study investigates the potential of Quick Response to be a more advanced form of supply chain collaboration program with extensive information sharing activities. Research design, data, and methodology - The mathematical model is developed to represent the two stage supply chain system with a single manufacturer and one retailer. In the numerical study with the proposed mathematical models, three supply chain systems including the traditional system, Quick Response, and the fully shared information system are compared in terms of their profits. Results - The numerical analysis shows both manufacturer and retailer obtain greater profits under Quick Response than in the traditional system. While the fully shared information outperforms Quick Response as well as the traditional system, it results in lower manufacturer's profit compared with Quick Response. Conclusions - According to the numerical examples, Quick Response is the effective supply chain collaboration program that is beneficial to every supply chain member. The fully shared information system, as a more advanced form of collaboration than Quick Response can bring more benefits to the whole supply chain system, but it is necessary to prepare the proper incentive program that enables every member to share its benefits equally.

• Asian-Australasian Journal of Animal Sciences
• /
• v.18 no.7
• /
• pp.1022-1028
• /
• 2005

The objectives of this study were to evaluate and compare the environmental load of two different concentrate feed supply systems to the Japanese domestic livestock industry using the Life-cycle Assessment (LCA) method. The current system was defined as that requiring 11.469 million tons of corn imported from the US by sea transport and supplied as concentrate feed to the Japanese domestic livestock industry. The new system proposed by Kaku et al. in 2004 was defined as where 802,830 tons of US imported corn would not be planted in US and would be replaced by barley planted in 278 thousand ha of Japanese domestic land left fallow for the past year. In this case, 909,000 tons of domestic harvest barley would have been supplied as concentrate feed to the Japanese domestic livestock industry in 2000. The activities taken into account within the two system boundaries were three stages: concentrate feed production, feed transportation and gas emission from the soil by chemical fertilizer. Finished compost was regarded as organic fertilizer and was put instead of chemical fertilizers within the system boundary. Adoption of this new concentrate feed supply system by the Japanese domestic livestock industry could reduce 78,462 tons $CO_2$-equivalents of global warming potential, 347 tons $SO_2$-equivalents of acidification potential, 54 tons $PO_4$-equivalents of eutrophication potential and 0.842 million GJ as energy consumption below 2,000 levels. This LCA study comparing two Japanese domestic livestock concentrate feed supply systems showed that the stage of feed transport contributed most to global warming and the stage of emission from the soil contributed most to acidification and eutrophication. The Japanese domestic livestock industry could participate in emissions trading with $CO_2$-equivalents reduced by shifting from some imported US corn as a concentrate feed to domestic barley planted in land left fallow. In that case the Japanese government could launch emissions trading in accordance with Kyoto Protocol in the future.

• Industrial Engineering and Management Systems
• /
• v.13 no.3
• /
• pp.304-318
• /
• 2014

It is necessary for a retailer to improve responsiveness to uncertain customer demand in product sales. In order to solve this problem, this paper discusses an optimal operation for a 2-stage-ordering-production system consisting of a retailer and a manufacturer. First, based on the demand information estimated at first order time $t_1$, the retailer determines the optimal initial order quantity $Q^*_1$, the optimal advertising cost $a^*_1$ and the optimal retail price $p^*_1$ of a single product at $t_1$, and then the manufacturer produces $Q^*_1$. Next, the retailer updates the demand information at second order time $t_2$. If the retailer finds that $Q^*_1$ dissatisfies the demand indicated by the demand information updated at $t_2$, the retailer determines the optimal second order quantity $Q^*_2$ under $Q^*_1$ and adjusts optimally the advertising cost and the retail price to $a^*_2$ and $p^*_2$ at $t_2$. Here, decision-making approaches for two situations are made-a decentralized supply chain (DSC) whose objective is to maximize the retailer's profit and an integrated supply chain (ISC) whose objective is to maximize the whole system's profit. In the numerical analysis, the results of the optimal decisions under DSC are compared with those under ISC. In addition, supply chain coordination is discussed to adjust the unit wholesale price at each order time as Nash Bargaining solutions.