IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v57y2006i9d10.1057_palgrave.jors.2602075.html
   My bibliography  Save this article

Opportunistic supply chain formation from qualified partners for a new market demand

Author

Listed:
  • S S Chauhan

    (INRIA-SAGEP, Ile du Saulcy - 57045)

  • J-M Proth

    (INRIA-SAGEP, Ile du Saulcy - 57045)

  • A M Sarmiento

    (University at Buffalo (SUNY))

  • R Nagi

    (University at Buffalo (SUNY))

Abstract

This paper addresses the problem of short-term supply chain design using the idle capacities of qualified partners in order to seize a new market opportunity. The new market opportunity is characterized by a deterministic forecast over a planning horizon. The production–distribution process is assumed to be organized in stages or echelons, and each echelon may have several qualified partners willing to participate. Partners within the echelon may differ in idle production capacity, operational cost, storage cost, etc, and we assume that idle capacity may be different from one period to another period. The objective is to design a supply chain by selecting one partner from each echelon to meet the forecasted demand without backlog and best possible production and logistics costs over the given planning horizon. The overall problem is formulated as a large mixed integer linear programming problem. We develop a decomposition-based solution approach that is capable of overcoming the complexity and dimensionality associated with the problem. Numerical results are presented to support the effectiveness of this approach.

Suggested Citation

  • S S Chauhan & J-M Proth & A M Sarmiento & R Nagi, 2006. "Opportunistic supply chain formation from qualified partners for a new market demand," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(9), pages 1089-1099, September.
    • Handle: RePEc:pal:jorsoc:v:57:y:2006:i:9:d:10.1057_palgrave.jors.2602075
    DOI: 10.1057/palgrave.jors.2602075
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/palgrave.jors.2602075
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/palgrave.jors.2602075?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hamilton Emmons & Stephen M. Gilbert, 1998. "Note. The Role of Returns Policies in Pricing and Inventory Decisions for Catalogue Goods," Management Science, INFORMS, vol. 44(2), pages 276-283, February.
    2. Fandel, G. & Stammen, M., 2004. "A general model for extended strategic supply chain management with emphasis on product life cycles including development and recycling," International Journal of Production Economics, Elsevier, vol. 89(3), pages 293-308, June.
    3. Gjerdrum, Jonatan & Shah, Nilay & Papageorgiou, Lazaros G., 2002. "Fair transfer price and inventory holding policies in two-enterprise supply chains," European Journal of Operational Research, Elsevier, vol. 143(3), pages 582-599, December.
    4. Hau Lee & Seungjin Whang, 1999. "Decentralized Multi-Echelon Supply Chains: Incentives and Information," Management Science, INFORMS, vol. 45(5), pages 633-640, May.
    5. Cakravastia, Andi & Toha, Isa S. & Nakamura, Nobuto, 2002. "A two-stage model for the design of supply chain networks," International Journal of Production Economics, Elsevier, vol. 80(3), pages 231-248, December.
    6. Hansen, P. H. & Hegedahl, B. & Hjortkjaer, S. & Obel, B., 1994. "A heuristic solution to the warehouse location-routing problem," European Journal of Operational Research, Elsevier, vol. 76(1), pages 111-127, July.
    7. Marshall L. Fisher, 1985. "An Applications Oriented Guide to Lagrangian Relaxation," Interfaces, INFORMS, vol. 15(2), pages 10-21, April.
    8. L. G. Mitten, 1970. "Branch-and-Bound Methods: General Formulation and Properties," Operations Research, INFORMS, vol. 18(1), pages 24-34, February.
    9. Vidal, Carlos J. & Goetschalckx, Marc, 1997. "Strategic production-distribution models: A critical review with emphasis on global supply chain models," European Journal of Operational Research, Elsevier, vol. 98(1), pages 1-18, April.
    10. Giannoccaro, Ilaria & Pontrandolfo, Pierpaolo, 2004. "Supply chain coordination by revenue sharing contracts," International Journal of Production Economics, Elsevier, vol. 89(2), pages 131-139, May.
    11. George B. Dantzig & Philip Wolfe, 1960. "Decomposition Principle for Linear Programs," Operations Research, INFORMS, vol. 8(1), pages 101-111, February.
    12. Chien, T. William, 1993. "Determining profit-maximizing production/shipping policies in a one-to-one direct shipping, stochastic demand environment," European Journal of Operational Research, Elsevier, vol. 64(1), pages 83-102, January.
    13. Bredstrom, David & Lundgren, Jan T. & Ronnqvist, Mikael & Carlsson, Dick & Mason, Andrew, 2004. "Supply chain optimization in the pulp mill industry--IP models, column generation and novel constraint branches," European Journal of Operational Research, Elsevier, vol. 156(1), pages 2-22, July.
    14. Gérard P. Cachon & Martin A. Lariviere, 1999. "Capacity Choice and Allocation: Strategic Behavior and Supply Chain Performance," Management Science, INFORMS, vol. 45(8), pages 1091-1108, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hêris Golpîra, 2017. "Robust bi-level optimization for an opportunistic supply chain network design problem in an uncertain and risky environment," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 27(1), pages 21-41.
    2. Ivanov, Dmitry & Sokolov, Boris & Kaeschel, Joachim, 2010. "A multi-structural framework for adaptive supply chain planning and operations control with structure dynamics considerations," European Journal of Operational Research, Elsevier, vol. 200(2), pages 409-420, January.
    3. Pan, Feng & Nagi, Rakesh, 2013. "Multi-echelon supply chain network design in agile manufacturing," Omega, Elsevier, vol. 41(6), pages 969-983.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roberta Pellegrino & Nicola Costantino & Danilo Tauro, 2020. "Advance Purchase Discounts for Supply Chain Finance System Coordination," Sustainability, MDPI, vol. 12(23), pages 1-20, December.
    2. Giannoccaro, Ilaria & Pontrandolfo, Pierpaolo, 2009. "Negotiation of the revenue sharing contract: An agent-based systems approach," International Journal of Production Economics, Elsevier, vol. 122(2), pages 558-566, December.
    3. Bellantuono, Nicola & Giannoccaro, Ilaria & Pontrandolfo, Pierpaolo & Tang, Christopher S., 2009. "The implications of joint adoption of revenue sharing and advance booking discount programs," International Journal of Production Economics, Elsevier, vol. 121(2), pages 383-394, October.
    4. Chauhan, Satyaveer S. & Proth, Jean-Marie, 2005. "Analysis of a supply chain partnership with revenue sharing," International Journal of Production Economics, Elsevier, vol. 97(1), pages 44-51, July.
    5. Zhou, Yong-Wu, 2009. "Two-echelon supply chain coordination through the unified number of annual orders," International Journal of Production Economics, Elsevier, vol. 117(1), pages 162-173, January.
    6. Hoai Thi & Duc Tran, 2014. "New and efficient algorithms for transfer prices and inventory holding policies in two-enterprise supply chains," Journal of Global Optimization, Springer, vol. 60(1), pages 5-24, September.
    7. Ahmad Rusdiansyah & Rescha Dwi Astuti Putri, 2020. "Model of stochastic spanning revenue-sharing contracts for multi-echelon supply chains," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(5), pages 302-313, October.
    8. Jeong, In-Jae, 2012. "A centralized/decentralized design of a full return contract for a risk-free manufacturer and a risk-neutral retailer under partial information sharing," International Journal of Production Economics, Elsevier, vol. 136(1), pages 110-115.
    9. Tsiakis, Panagiotis & Papageorgiou, Lazaros G., 2008. "Optimal production allocation and distribution supply chain networks," International Journal of Production Economics, Elsevier, vol. 111(2), pages 468-483, February.
    10. Henk Zijm & Judith Timmer, 2008. "Coordination mechanisms for inventory control in three-echelon serial and distribution systems," Annals of Operations Research, Springer, vol. 158(1), pages 161-182, February.
    11. Leng, Mingming & Zhu, An, 2009. "Side-payment contracts in two-person nonzero-sum supply chain games: Review, discussion and applications," European Journal of Operational Research, Elsevier, vol. 196(2), pages 600-618, July.
    12. Jeong, In-Jae & Jorge Leon, V., 2012. "A serial supply chain of newsvendor problem with safety stocks under complete and partial information sharing," International Journal of Production Economics, Elsevier, vol. 135(1), pages 412-419.
    13. Kristianto, Yohanes & Gunasekaran, Angappa & Helo, Petri, 2017. "Building the “Triple R” in global manufacturing," International Journal of Production Economics, Elsevier, vol. 183(PC), pages 607-619.
    14. Ogbe, Emmanuel & Li, Xiang, 2017. "A new cross decomposition method for stochastic mixed-integer linear programming," European Journal of Operational Research, Elsevier, vol. 256(2), pages 487-499.
    15. E A Silver, 2004. "An overview of heuristic solution methods," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(9), pages 936-956, September.
    16. Hiroko Nakamura & Shinji Suzuki & Tomobe Hironori & Yuya Kajikawa & Ichiro Sakata, 2011. "Citation lag analysis in supply chain research," Scientometrics, Springer;Akadémiai Kiadó, vol. 87(2), pages 221-232, May.
    17. Cai, Wenbo & Abdel-Malek, Layek & Hoseini, Babak & Rajaei Dehkordi, Sharareh, 2015. "Impact of flexible contracts on the performance of both retailer and supplier," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 429-444.
    18. Son, Joong Y. & Sheu, Chwen, 2008. "The impact of replenishment policy deviations in a decentralized supply chain," International Journal of Production Economics, Elsevier, vol. 113(2), pages 785-804, June.
    19. Nouri, Mina & Hosseini-Motlagh, Seyyed-Mahdi & Nematollahi, Mohammadreza & Sarker, Bhaba R., 2018. "Coordinating manufacturer's innovation and retailer's promotion and replenishment using a compensation-based wholesale price contract," International Journal of Production Economics, Elsevier, vol. 198(C), pages 11-24.
    20. Retsef Levi & Georgia Perakis & Cong Shi & Wei Sun, 2020. "Strategic Capacity Planning Problems in Revenue‐Sharing Joint Ventures," Production and Operations Management, Production and Operations Management Society, vol. 29(3), pages 664-687, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:57:y:2006:i:9:d:10.1057_palgrave.jors.2602075. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.