IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v32y2004i4p301-312.html
   My bibliography  Save this article

Supply chain coordination with demand disruptions

Author

Listed:
  • Qi, Xiangtong
  • Bard, Jonathan F.
  • Yu, Gang

Abstract

The purpose of this paper is to investigate an one-supplier-one-retailer supply chain that experiences a disruption in demand during the planning horizon. While demand uncertainty has long been a central research issue in supply chain management, little attention has been given to disruptions once the production plan has been made. In this paper, we show that changes to the original plan induced by a disruption may impose considerable deviation costs throughout the system. One of our general goals is to analyze these costs. When the production plan and the supply chain coordination scheme are designed in a static manner, as is most often the case, both will have to be adjusted under a disruption scenario. Using wholesale quantity discount policies, we derive conditions under which the supply chain can be coordinated so that the maximum potential profit is realized. Our results are applicable for both centralized and decentralized decision-making.

Suggested Citation

  • Qi, Xiangtong & Bard, Jonathan F. & Yu, Gang, 2004. "Supply chain coordination with demand disruptions," Omega, Elsevier, vol. 32(4), pages 301-312, August.
    • Handle: RePEc:eee:jomega:v:32:y:2004:i:4:p:301-312
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305-0483(03)00165-8
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    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. Kevin Weng, Z., 1995. "Modeling quantity discounts under general price-sensitive demand functions: Optimal policies and relationships," European Journal of Operational Research, Elsevier, vol. 86(2), pages 300-314, October.
    2. Williams, Terry & Ackermann, Fran & Eden, Colin, 2003. "Structuring a delay and disruption claim: An application of cause-mapping and system dynamics," European Journal of Operational Research, Elsevier, vol. 148(1), pages 192-204, July.
    3. Fangruo Chen, 1998. "Echelon Reorder Points, Installation Reorder Points, and the Value of Centralized Demand Information," Management Science, INFORMS, vol. 44(12-Part-2), pages 221-234, December.
    4. Hau L. Lee & Meir J. Rosenblatt, 1986. "A Generalized Quantity Discount Pricing Model to Increase Supplier's Profits," Management Science, INFORMS, vol. 32(9), pages 1177-1185, September.
    5. Boyaci, Tamer & Gallego, Guillermo, 2002. "Coordinating pricing and inventory replenishment policies for one wholesaler and one or more geographically dispersed retailers," International Journal of Production Economics, Elsevier, vol. 77(2), pages 95-111, May.
    6. Andy A. Tsay, 1999. "The Quantity Flexibility Contract and Supplier-Customer Incentives," Management Science, INFORMS, vol. 45(10), pages 1339-1358, October.
    7. Z. Kevin Weng & Amy Zeng, 2001. "The Role of Quantity Discounts in the Presence of Heterogeneous Buyers," Annals of Operations Research, Springer, vol. 107(1), pages 369-383, October.
    8. Abel P. Jeuland & Steven M. Shugan, 1983. "Managing Channel Profits," Marketing Science, INFORMS, vol. 2(3), pages 239-272.
    9. K. Sridhar Moorthy, 1987. "Comment—Managing Channel Profits: Comment," Marketing Science, INFORMS, vol. 6(4), pages 375-379.
    10. Fangruo Chen & Awi Federgruen & Yu-Sheng Zheng, 2001. "Coordination Mechanisms for a Distribution System with One Supplier and Multiple Retailers," Management Science, INFORMS, vol. 47(5), pages 693-708, May.
    11. Lau, Hon-Shiang & Lau, Amy Hing-Ling, 1999. "Manufacturer's pricing strategy and return policy for a single-period commodity," European Journal of Operational Research, Elsevier, vol. 116(2), pages 291-304, July.
    12. Z. Kevin Weng, 1995. "Channel Coordination and Quantity Discounts," Management Science, INFORMS, vol. 41(9), pages 1509-1522, September.
    Full references (including those not matched with items on IDEAS)

    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. Sarmah, S.P. & Acharya, D. & Goyal, S.K., 2006. "Buyer vendor coordination models in supply chain management," European Journal of Operational Research, Elsevier, vol. 175(1), pages 1-15, November.
    2. Brian Tomlin, 2003. "Capacity Investments in Supply Chains: Sharing the Gain Rather Than Sharing the Pain," Manufacturing & Service Operations Management, INFORMS, vol. 5(4), pages 317-333, November.
    3. 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.
    4. Fangruo Chen, 1999. "Decentralized Supply Chains Subject to Information Delays," Management Science, INFORMS, vol. 45(8), pages 1076-1090, August.
    5. Zhou, Yong-Wu & Min, Jie & Goyal, Suresh K., 2008. "Supply-chain coordination under an inventory-level-dependent demand rate," International Journal of Production Economics, Elsevier, vol. 113(2), pages 518-527, June.
    6. Fernando Bernstein & Awi Federgruen, 2003. "Pricing and Replenishment Strategies in a Distribution System with Competing Retailers," Operations Research, INFORMS, vol. 51(3), pages 409-426, June.
    7. Viktoryia Buhayenko & Dick den Hertog, 2017. "Adjustable Robust Optimisation approach to optimise discounts for multi-period supply chain coordination under demand uncertainty," International Journal of Production Research, Taylor & Francis Journals, vol. 55(22), pages 6801-6823, November.
    8. Mingzhu Yu & Ruina Yang & Zelong Yi & Xuwen Cong, 2020. "Contracting in Ocean Shipping Market Under Asymmetric Information," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 37(02), pages 1-24, March.
    9. 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.
    10. Xiao, Tiaojun & Qi, Xiangtong & Yu, Gang, 2007. "Coordination of supply chain after demand disruptions when retailers compete," International Journal of Production Economics, Elsevier, vol. 109(1-2), pages 162-179, September.
    11. Nihat Altintas & Feryal Erhun & Sridhar Tayur, 2008. "Quantity Discounts Under Demand Uncertainty," Management Science, INFORMS, vol. 54(4), pages 777-792, April.
    12. Desheng Wu, 2011. "Joint pricing-servicing decision and channel strategies in the supply chain," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 19(1), pages 99-137, March.
    13. Boyaci, Tamer & Gallego, Guillermo, 2002. "Coordinating pricing and inventory replenishment policies for one wholesaler and one or more geographically dispersed retailers," International Journal of Production Economics, Elsevier, vol. 77(2), pages 95-111, May.
    14. Demirkan, Haluk & Cheng, Hsing Kenneth, 2008. "The risk and information sharing of application services supply chain," European Journal of Operational Research, Elsevier, vol. 187(3), pages 765-784, June.
    15. Fu, Qi & Zhu, Kaijie, 2010. "Endogenous information acquisition in supply chain management," European Journal of Operational Research, Elsevier, vol. 201(2), pages 454-462, March.
    16. Qinan Wang & Ruifang Wang, 2005. "Quantity discount pricing policies for heterogeneous retailers with price sensitive demand," Naval Research Logistics (NRL), John Wiley & Sons, vol. 52(7), pages 645-658, October.
    17. Lau, Amy Hing Ling & Lau, Hon-Shiang & Zhou, Yong-Wu, 2007. "A stochastic and asymmetric-information framework for a dominant-manufacturer supply chain," European Journal of Operational Research, Elsevier, vol. 176(1), pages 295-316, January.
    18. Fangruo Chen & Awi Federgruen & Yu-Sheng Zheng, 2001. "Coordination Mechanisms for a Distribution System with One Supplier and Multiple Retailers," Management Science, INFORMS, vol. 47(5), pages 693-708, May.
    19. Halati, Abolhassan & He, Yuanjie, 2010. "Analysis of supply chains with quantity based fixed incentives," European Journal of Operational Research, Elsevier, vol. 202(1), pages 214-222, April.
    20. Chen, Kebing & Xiao, Tiaojun, 2011. "Ordering policy and coordination of a supply chain with two-period demand uncertainty," European Journal of Operational Research, Elsevier, vol. 215(2), pages 347-357, December.

    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:eee:jomega:v:32:y:2004:i:4:p:301-312. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    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.