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Dynamic coalition reformation for adaptive demand and capacity sharing

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  • Seok, Hyesung
  • Nof, Shimon Y.

Abstract

To deal with volatile product demand and rapidly changing manufacturing technologies for sustainable returns, selective collaboration among companies in supply networks (SNs) is required. Recently, demand and capacity sharing among independent and non-competitive manufacturers, at the same horizontal layer in SNs, has been studied. Through an appropriate coalition for collaborative demand and capacity sharing, manufacturers can minimize their lost sales, as well as maximize production capacity utilization against lumpy real demand. In a previous study, we have developed the Collaborative Demand and Capacity Sharing (CDCS) protocol which addresses a long-term profitable and well-balanced collaboration for each manufacturer through distributed decision making. However, the uncertainty of circumstances calls for an effective and timely reformation of coalitions. In reality, there is a trade-off between frequent accommodation to changeable environments and high additional costs incurred by reformation. Hence, in this paper, we design the Adaptive CDCS protocol based on dynamic contract mechanism. In each period, our protocol suggests whether to reform existing coalitions or not based on theoretical analyses of long-term expected net profit. To evaluate its performance, a numerical experiment is conducted by comparing three models: no collaboration, static collaboration, and dynamic collaboration by Adaptive CDCS protocol. Dynamic collaboration results in more profits and its balanced redistribution by accommodating with changeable conditions.

Suggested Citation

  • Seok, Hyesung & Nof, Shimon Y., 2014. "Dynamic coalition reformation for adaptive demand and capacity sharing," International Journal of Production Economics, Elsevier, vol. 147(PA), pages 136-146.
  • Handle: RePEc:eee:proeco:v:147:y:2014:i:pa:p:136-146
    DOI: 10.1016/j.ijpe.2013.09.003
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Yilmaz, Ibrahim & Yoon, Sang Won & Seok, Hyesung, 2017. "A framework and algorithm for fair demand and capacity sharing in collaborative networks," International Journal of Production Economics, Elsevier, vol. 193(C), pages 137-147.
    2. Lei Xie & Hongshuai Han, 2020. "Capacity Sharing and Capacity Investment of Environment-Friendly Manufacturing: Strategy Selection and Performance Analysis," IJERPH, MDPI, vol. 17(16), pages 1-20, August.
    3. Hyesung Seok & Shimon Y. Nof, 2018. "Intelligent information sharing among manufacturers in supply networks: supplier selection case," Journal of Intelligent Manufacturing, Springer, vol. 29(5), pages 1097-1113, June.
    4. Schwab, Leila & Gold, Stefan & Reiner, Gerald, 2019. "Exploring financial sustainability of SMEs during periods of production growth: A simulation study," International Journal of Production Economics, Elsevier, vol. 212(C), pages 8-18.
    5. Mohebbi, Shima & Li, Xueping, 2015. "Coalitional game theory approach to modeling suppliers' collaboration in supply networks," International Journal of Production Economics, Elsevier, vol. 169(C), pages 333-342.
    6. Katsaliaki, Korina & Kumar, Sameer & Loulos, Vasilis, 2024. "Supply chain coopetition: A review of structures, mechanisms and dynamics," International Journal of Production Economics, Elsevier, vol. 267(C).
    7. Cleophas, Catherine & Cottrill, Caitlin & Ehmke, Jan Fabian & Tierney, Kevin, 2019. "Collaborative urban transportation: Recent advances in theory and practice," European Journal of Operational Research, Elsevier, vol. 273(3), pages 801-816.
    8. Yinfeng Xu & Rongteng Zhi & Feifeng Zheng & Ming Liu, 2022. "Competitive algorithm for scheduling of sharing machines with rental discount," Journal of Combinatorial Optimization, Springer, vol. 44(1), pages 414-434, August.
    9. Chen, Xu & Peng, Ying & Wang, Xiaojun & Wang, Pengfei, 2024. "Capacity sharing between competing manufacturers: A collective good or a detrimental effect?," International Journal of Production Economics, Elsevier, vol. 268(C).
    10. Schleich, Benjamin Rafael & Seok, Hyesung & Yoon, Sang Won, 2017. "Performance assessment in homogeneous/heterogeneous collaborative enterprise networks with inventory adjustment," European Journal of Operational Research, Elsevier, vol. 261(3), pages 958-970.

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