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Supply chain scheduling and coordination with dual delivery modes and inventory storage cost

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  • Yeung, Wing-Kwan
  • Choi, Tsan-Ming
  • Cheng, T.C.E.

Abstract

We study a two-echelon supply chain scheduling problem in which a manufacturer acquires supplies from an upstream supplier and processes orders from the downstream retailers. The supply chain sells a single short-life product in a single season. We consider the scenario where the manufacturer can only accept some of the orders from the retailers due to its supplier's common production time window and its own two common production and delivery time windows. The upstream supplier processes materials and delivers the semi-finished products to the manufacturer within its time window. Then the manufacturer further processes these products to produce finished products and delivers them to the retailers within its two time windows, where one window is for production and normal delivery, and the other is for production and express delivery. Having to store the materials before processing them, the supplier incurs a storage cost, which depends on the order size and storage time. The manufacturer pays the transportation cost for delivering the finished products to the retailers. Due to double marginalization, the performance of the supply chain is sub-optimal. We model the supply chain problem as a flow shop scheduling problem with multiple common time windows. We derive some dominance properties and establish some theorems that help solve the sequencing problems for the orders and eliminate the idle time among the orders. Based on these results, we develop fast pseudo-polynomial dynamic algorithms to optimally solve the problem. We prove that the problem is NP-hard in the ordinary sense only. We develop two practically relevant and robust methods for the supply chain to achieve optimal profit-making performance through channel coordination.

Suggested Citation

  • Yeung, Wing-Kwan & Choi, Tsan-Ming & Cheng, T.C.E., 2011. "Supply chain scheduling and coordination with dual delivery modes and inventory storage cost," International Journal of Production Economics, Elsevier, vol. 132(2), pages 223-229, August.
  • Handle: RePEc:eee:proeco:v:132:y:2011:i:2:p:223-229
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Liang Tang & Zhihong Jin & Xuwei Qin & Ke Jing, 2019. "Supply chain scheduling in a collaborative manufacturing mode: model construction and algorithm design," Annals of Operations Research, Springer, vol. 275(2), pages 685-714, April.
    2. Chen, Gang & Govindan, Kannan & Yang, Zhong-Zhen & Choi, Tsan-Ming & Jiang, Liping, 2013. "Terminal appointment system design by non-stationary M(t)/Ek/c(t) queueing model and genetic algorithm," International Journal of Production Economics, Elsevier, vol. 146(2), pages 694-703.
    3. Bushuev, Maxim A. & Guiffrida, Alfred L., 2012. "Optimal position of supply chain delivery window: Concepts and general conditions," International Journal of Production Economics, Elsevier, vol. 137(2), pages 226-234.
    4. B.‐Y. Cheng & J.Y.‐T. Leung & K. Li & S.‐L. Yang, 2015. "Single batch machine scheduling with deliveries," Naval Research Logistics (NRL), John Wiley & Sons, vol. 62(6), pages 470-482, September.
    5. Liu, Weihua & Wang, Qian & Mao, Qiaomei & Wang, Shuqing & Zhu, Donglei, 2015. "A scheduling model of logistics service supply chain based on the mass customization service and uncertainty of FLSP’s operation time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 83(C), pages 189-215.
    6. Tülin İnkaya & Mehmet Akansel, 2017. "Coordinated scheduling of the transfer lots in an assembly-type supply chain: a genetic algorithm approach," Journal of Intelligent Manufacturing, Springer, vol. 28(4), pages 1005-1015, April.
    7. Huang, Di & Ouyang, Lian Qun & Zhou, Hong, 2012. "Note on: Managing multi-echelon multi-item channels with trade allowances under credit period," International Journal of Production Economics, Elsevier, vol. 138(1), pages 117-124.
    8. Cheng, Ba-Yi & Leung, Joseph Y-T. & Li, Kai, 2017. "Integrated scheduling on a batch machine to minimize production, inventory and distribution costs," European Journal of Operational Research, Elsevier, vol. 258(1), pages 104-112.
    9. Piewthongngam, Kullapapruk & Pathumnakul, Supachai & Homkhampad, Suphakan, 2013. "An interactive approach to optimize production–distribution planning for an integrated feed swinecompany," International Journal of Production Economics, Elsevier, vol. 142(2), pages 290-301.
    10. Wolfgang Albrecht & Martin Steinrücke, 2020. "Continuous-time scheduling of production, distribution and sales in photovoltaic supply chains with declining prices," Flexible Services and Manufacturing Journal, Springer, vol. 32(3), pages 629-667, September.
    11. F. Tao & Y. Cheng & L. Zhang & A. Y. C. Nee, 2017. "Advanced manufacturing systems: socialization characteristics and trends," Journal of Intelligent Manufacturing, Springer, vol. 28(5), pages 1079-1094, June.
    12. F. Tao & Y. Cheng & L. Zhang & A. Y. C. Nee, 2017. "Advanced manufacturing systems: socialization characteristics and trends," Journal of Intelligent Manufacturing, Springer, vol. 28(5), pages 1079-1094, June.
    13. Jun Pei & Xinbao Liu & Panos M. Pardalos & Wenjuan Fan & Ling Wang & Shanlin Yang, 2016. "Solving a supply chain scheduling problem with non-identical job sizes and release times by applying a novel effective heuristic algorithm," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(4), pages 765-776, March.
    14. Chen Wei & Sobhan Asian & Gurdal Ertek & Zhi-Hua Hu, 2020. "Location-based pricing and channel selection in a supply chain: a case study from the food retail industry," Annals of Operations Research, Springer, vol. 291(1), pages 959-984, August.

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