IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v133y2011i1p403-415.html
   My bibliography  Save this article

Inventory control in a two-echelon dual-channel supply chain with setup of production and delivery

Author

Listed:
  • Takahashi, Katsuhiko
  • Aoi, Takahiko
  • Hirotani, Daisuke
  • Morikawa, Katsumi

Abstract

This paper considers a two-echelon dual-channel supply chain model with setup of production and delivery and develops a new inventory control policy for the supply chain. Previously, a two-echelon supply chain model without setup of production and delivery is considered and a one-for-one inventory control policy is applied to the supply chain. In the inventory control policy, production is stopped when the warehouse inventory reaches the upper limit and is started again immediately after the inventory drops below the limit. Moreover, delivery to the retailer is stopped when the store inventory reaches the upper limit and is started again immediately after the inventory drops below the limit. The total cost that consists of inventory holding costs and lost sales cost is considered, and setup costs are not considered in the total cost. Once setup costs are introduced, the one-for-one inventory control policy is no longer appropriate. Then, this paper develops a new control policy for the two-echelon dual-channel supply chain with setup of production and delivery. As performance measure, the total cost that consists of inventory holding costs, lost sales cost, and production and delivery setup costs is considered, and the total cost calculated on the basis of Markov analysis demonstrates the effectiveness of the proposed control policy.

Suggested Citation

  • Takahashi, Katsuhiko & Aoi, Takahiko & Hirotani, Daisuke & Morikawa, Katsumi, 2011. "Inventory control in a two-echelon dual-channel supply chain with setup of production and delivery," International Journal of Production Economics, Elsevier, vol. 133(1), pages 403-415, September.
  • Handle: RePEc:eee:proeco:v:133:y:2011:i:1:p:403-415
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527310001404
    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. Yue, Xiaohang & Liu, John, 2006. "Demand forecast sharing in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 174(1), pages 646-667, October.
    2. Dumrongsiri, Aussadavut & Fan, Ming & Jain, Apurva & Moinzadeh, Kamran, 2008. "A supply chain model with direct and retail channels," European Journal of Operational Research, Elsevier, vol. 187(3), pages 691-718, June.
    3. Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
    4. Hau L. Lee & Kut C. So & Christopher S. Tang, 2000. "The Value of Information Sharing in a Two-Level Supply Chain," Management Science, INFORMS, vol. 46(5), pages 626-643, May.
    5. Leroy B. Schwarz, 1973. "A Simple Continuous Review Deterministic One-Warehouse N-Retailer Inventory Problem," Management Science, INFORMS, vol. 19(5), pages 555-566, January.
    6. Retsef Levi & Robin Roundy & David Shmoys & Maxim Sviridenko, 2008. "A Constant Approximation Algorithm for the One-Warehouse Multiretailer Problem," Management Science, INFORMS, vol. 54(4), pages 763-776, April.
    7. Agatz, Niels A.H. & Fleischmann, Moritz & van Nunen, Jo A.E.E., 2008. "E-fulfillment and multi-channel distribution - A review," European Journal of Operational Research, Elsevier, vol. 187(2), pages 339-356, June.
    8. Leroy B. Schwarz & Bryan L. Deuermeyer & Ralph D. Badinelli, 1985. "Fill-Rate Optimization in a One-Warehouse N-Identical Retailer Distribution System," Management Science, INFORMS, vol. 31(4), pages 488-498, April.
    9. Antony Svoronos & Paul Zipkin, 1991. "Evaluation of One-for-One Replenishment Policies for Multiechelon Inventory Systems," Management Science, INFORMS, vol. 37(1), pages 68-83, January.
    10. Nanda Kumar & Ranran Ruan, 2006. "On manufacturers complementing the traditional retail channel with a direct online channel," Quantitative Marketing and Economics (QME), Springer, vol. 4(3), pages 289-323, September.
    11. S. Anily & A. Federgruen, 1990. "One Warehouse Multiple Retailer Systems with Vehicle Routing Costs," Management Science, INFORMS, vol. 36(1), pages 92-114, January.
    12. Kevin Chiang, Wei-yu & Monahan, George E., 2005. "Managing inventories in a two-echelon dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 162(2), pages 325-341, April.
    13. Kay-Yut Chen & Murat Kaya & Özalp Özer, 2008. "Dual Sales Channel Management with Service Competition," Manufacturing & Service Operations Management, INFORMS, vol. 10(4), pages 654-675, June.
    14. Lode Li, 2002. "Information Sharing in a Supply Chain with Horizontal Competition," Management Science, INFORMS, vol. 48(9), pages 1196-1212, September.
    15. Yao, Dong-Qing & Liu, John J., 2003. "Channel redistribution with direct selling," European Journal of Operational Research, Elsevier, vol. 144(3), pages 646-658, February.
    16. Huang, Wei & Swaminathan, Jayashankar M., 2009. "Introduction of a second channel: Implications for pricing and profits," European Journal of Operational Research, Elsevier, vol. 194(1), pages 258-279, April.
    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. Hamed Jafari & Seyed Reza Hejazi & Morteza Rasti-Barzoki, 2016. "Pricing Decisions in Dual-Channel Supply Chain Including Monopolistic Manufacturer and Duopolistic Retailers: A Game-Theoretic Approach," Journal of Industry, Competition and Trade, Springer, vol. 16(3), pages 323-343, September.
    2. repec:eee:apmaco:v:256:y:2015:i:c:p:913-929 is not listed on IDEAS
    3. repec:eee:ejores:v:272:y:2019:i:1:p:147-161 is not listed on IDEAS
    4. Ding, Qing & Dong, Ciwei & Pan, Zhicong, 2016. "A hierarchical pricing decision process on a dual-channel problem with one manufacturer and one retailer," International Journal of Production Economics, Elsevier, vol. 175(C), pages 197-212.
    5. repec:eee:transe:v:112:y:2018:i:c:p:84-106 is not listed on IDEAS
    6. repec:wsi:apjorx:v:35:y:2018:i:02:n:s0217595918400043 is not listed on IDEAS
    7. repec:eee:ejores:v:273:y:2019:i:3:p:968-982 is not listed on IDEAS
    8. repec:eee:ejores:v:268:y:2018:i:1:p:215-230 is not listed on IDEAS
    9. repec:spr:elcore:v:18:y:2018:i:3:d:10.1007_s10660-017-9269-4 is not listed on IDEAS
    10. repec:eee:jomega:v:84:y:2019:i:c:p:212-231 is not listed on IDEAS

    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:proeco:v:133:y:2011:i:1:p:403-415. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.