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Capacity-delivery coordination in supply chains: a cost-based approach

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  • Lihua Chen
  • Alfred L. Guiffrida
  • Pratim Datta

Abstract

We develop a cost-based model considering a two-stage supply chain with a buyer ordering from a supplier. The model is constructed to coordinate the supply chain by joint decisions over delivery performance and capacity management. In this model, the supplier randomly assigns a portion of his permanent capacity to the buyer and the buyer determines his order quantity accordingly. A delivery window is used to classify deliveries as early, on-time or late and is used to evaluate the delivery performance of the supplier when delivery time is governed by a truncated normal probability density function. Numerical sensitivity analyses are presented to illustrate the significant managerial implications of this model.

Suggested Citation

  • Lihua Chen & Alfred L. Guiffrida & Pratim Datta, 2018. "Capacity-delivery coordination in supply chains: a cost-based approach," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 32(3), pages 290-312.
    • Handle: RePEc:ids:ijores:v:32:y:2018:i:3:p:290-312
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    Cited by:

    1. Tao, Liangyan & Liu, Sifeng & Xie, Naiming & Javed, Saad Ahmed, 2021. "Optimal position of supply chain delivery window with risk-averse suppliers: A CVaR optimization approach," International Journal of Production Economics, Elsevier, vol. 232(C).

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