Browsing by Subject "Supply chain management"

Now showing 1 - 11 of 11

Open Access
Designing intervention scheme for vaccine market: A bilevel programming approach
(Springer, 2020-06) Demirci, E. Z.; Erkip, Nesim Kohen
Public-interest goods benefit consumers and also generate external benefits boosting societal welfare. Despite this characteristic of these goods, their level of consumption or production are generally well below the socially desirable levels without intervention. Motivated by influenza vaccine market, this paper examines the intervention design problem for a public-interest good facing yield uncertainty in production as well as inefficiencies in distribution and allocation. The proposed mechanism considers two intervention tools with the aim of resolving the inefficiencies in the system and allowing the actors to take socially desirable decisions. The first tool is to intervene so that demand level for the good is increased; we call it demand increasing strategy. The second tool aims to support the production, allocation, and distribution by investing in research and development and better planning and enhances the availability; we call this as availability increasing strategy. The intervention design problem is based on stylized demand and availability models that take into account investments made to improve them. The model suggested is experimented by a numerical study to analyze the impact of applying proposed joint mechanism in US influenza vaccine market. The results show that proposed strategy is very effectual in terms of vaccination percentages achieved and budget savings realized beyond the current practices, and the improvement in vaccination percentages is even greater when uncertainty in the system is higher. Besides, the results suggest that as long as the parameter calibration and decision problems are solved consistently, availability can be approximated by its average value when necessary.
Embargo
Integrating efforts for product development and market penetration
(Elsevier BV, 2023-07-16) Demirci, Ece Zeliha; Erkip, Nesim
In this paper, we build a decision model to explore an innovative firm’s budget allocation problem, which needs to be solved for each successive generation of a product. The firm introduces the product to the market through a distributor while aiming to maximize the market potential. This goal can be achieved by investing in R&D and increasing availability using subsidies registered to the distributor. We analyze the problem using a game theoretical model and provide a guideline for the funding strategy. We show that the optimal budget allocation decision is characterized by two budget thresholds and a threshold on the cost efficiency of R&D. We identify and analyze the effects of two significant parameters, total available budget and efficiency level of R&D, on the optimal solution. In addition, we assess the model’s applicability by examining the expected excess budget requirement and the distributor’s expected profit. We provide valuable managerial insights on when and how to prioritize the two components of the budget.
Open Access
A joint production and transportation planning problem with heterogeneous vehicles
(2014) Toptal, A.; Koc, U.; Sabuncuoglu, I.
We consider a manufacturer's planning problem to schedule order production and transportation to respective destinations. The manufacturer in this setting can use two vehicle types for outbound shipments. The first type is available in unlimited numbers. The availability of the second type, which is less expensive, changes over time. Motivated by some industry practices, we present formulations for three different solution approaches: the myopic solution, the hierarchical solution and the coordinated solution. These approaches vary in how the underlying production and transportation subproblems are solved, that is, sequentially versus jointly or heuristically versus optimally. We provide intractability proofs or polynomial-time exact solution procedures for the sub-problems and their special cases. We also compare the three solution approaches over a numerical study to quantify the savings from integration and explicit consideration of transportation availabilities. Our analytical and numerical results set a foundation and a need for a heuristic to solve the integrated problem. We thus propose a tabu search heuristic, which quickly generates near-optimal solutions.
Open Access
Modelling imperfect advance demand information and analysis of optimal inventory policies
(Elsevier, 2006) Tan, T.; Güllü, R.; Erkip, N.
We consider an inventory control problem where it is possible to collect some imperfect information on future demand. We refer to such information as imperfect Advance Demand Information (ADI), which may occur in different forms of applications. A simple example is a company that uses sales representatives to market its products, in which case the collection of sales representatives' information as to the number of customers interested in a product can generate an indication about the future sales of that product, hence it constitutes imperfect ADI. Other applications include internet retailing, Vendor Managed Inventory (VMI) applications and Collaborative Planning, Forecasting, and Replenishment (CPFR) environments. We develop a model that incorporates imperfect ADI with ordering decisions. Under our system settings, we show that the optimal policy is of order-up-to type, where the order level is a function of imperfect ADI. We also provide some characterizations of the optimal solution. We develop an expression for the expected cost benefits of imperfect ADI for the myopic problem. Our analytical and empirical findings reveal the conditions under which imperfect ADI is more valuable.
Open Access
Multi-period inventory models with price protection
(2007) Ahat, Nurdan
In an environment with declining sales prices, retailers (or any reseller) often face the risk of buying high and selling low. In order to limit their channel partners’ exposure to such risks and increase the availability of their products in the marketplace, suppliers often offer price protection. With price protection, a retailer is reimbursed with a percentage of the procurement cost declines, for the inventory that the retailer ordered within a given price protection age limit. We study the optimal inventory policy of the retailer under such price protection terms in a multi–period finite horizon setting with stochastic demand. We propose three different models for the treatment of unsatisfied demand. For the case of full backlogging, we show that the order–up–to type policies are optimal. In a numerical study, we study the behavior of the retailer and investigate the impact of price protection terms on the operational performance of the retailer and the supplier under a variety of settings.
Embargo
Risk pooling under demand and price uncertainty
(Elsevier BV, 2023-11-22) Güllü, Refik; Erkip, Nesim
This paper studies purchasing a commodity or a perishable item under stochastically evolving and correlated prices for a distribution system environment. We consider the central purchasing of the commodity under the demand process correlated with the random price and decide on the timing and quantity of allocation to demand locations. As an implementation of the physical pooling concept, we investigate the benefits of pooling price and demand risk when the forward purchase is realized for all demand locations. We also study the benefits of informational pooling concepts by deciding on the allocation timing. Even when the demand locations are independent entities, organizing joint purchasing of a commodity may take advantage of economies of scale with a more reliable and less expensive delivery option. We develop a model to guide the purchasing and allocation of quantities and employ multi-echelon inventory theory methods and stochastic processes commonly used in financial engineering and operations management literature.
Open Access
Sourcing decisions with capacity reservation contracts
(Elsevier, 2001) Serel, D. A.; Dada, M.; Moskowitz, H.
By committing to long-term supply contracts, buyers seek to lower their purchasing costs, and have products delivered without interruption. When a long-term contract is available, suppliers are less pressured to find new customers, and can afford to charge a price lower than the prevailing spot market price. We examine sourcing decisions of a firm in the presence of a capacity reservation contract that this firm makes with its long-term supplier in addition to the spot market alternative. This contract entails delivery of any desired portion of a reserved fixed capacity in exchange for a guaranteed payment by the buyer. We investigate rational actions of the two parties under two different types of periodic review inventory control policies used by the buyer: the two-number policy, and the base stock policy. When typical demand probability distributions are considered, inclusion of the spot market source in the buyer's procurement plan significantly reduces the capacity commitments from the long-term supplier.
Open Access
Stability and monotonicity in newsvendor situations
(2012) Özen, U.; Erkip, N.; Slikker, M.
This study considers a supply chain that consists of n retailers, each of them facing a newsvendor problem, and a supplier. Groups of retailers might increase their expected joint profit by joint ordering and inventory centralization. However, we assume that the retailers impose some level of stock that should be dedicated to them. In this situation, we show that the associated cooperative game has a non-empty core. Afterwards, we concentrate on a dynamic situation, where several model cost parameters and the retailers' dedicated stock levels can change. We investigate how the profit division might be affected by these changes. We focus on four monotonicity properties. We identify several classes of games with retailers, where some of the monotonicity properties hold. Moreover, we show that pairs of cooperative games associated with newsvendor situations do not necessarily satisfy these properties in general, when changes in dedicated stock levels are in concern.
Open Access
Supply chain management as the key to a firm's strategy in the global marketplace: trends and research agenda
(Emerald, 2015) González-Loureiro, M.; Kiessling, T.; Dabic, M.
Purpose – The purpose of this paper is to analyze the intersection of two literature streams: that of strategy and supply chain management (SCM). This review should create a better understanding of “strategic SCM” by focussing on relevant theories in the strategic management field and their intersection with SCM to develop a joint research agenda. Design/methodology/approach – The authors conducted a correspondence analysis on the content of 3,402 articles from the top SCM journals. This analysis provides a map of the intellectual structure of content in this field to date. The key trends and changes were identified in strategic SCM research from 1990-2014 as well as the intersection with the key schools of strategic management. Findings – The results suggest that SCM is key to a successful deployment of strategy for competing in the global marketplace. The main theoretical foundations for research in this field were identified and discussed. Gaps were detected and combinations of theoretical foundations of strategic management and SCM suggest four poles for future research: agents and focal firm; distributions and logistics strategic models; SCM competitive requirements; SCM relational governance. Research limitations/implications – Scholars in both the strategy and the SCM fields continue to search for competitive advantages. Much recent research indicates that strategic SCM can be a critical source for that advantage. One of the limitations of the research is that the analysis does not include every journal that published an article mentioning SCM. However, the 34 journals selected are reputed to be the most influential on SCM and focussed primarily on SCM. Practical implications – The map of the intellectual structure of research to strategic SCM highlights the need to combine different theoretical approaches to the complex phenomenon of SCM. Practitioners should consider the supply chain as an informal organization and should devote time and resources to build a shared advantage across the supply chain. They should also consider the inherent benefits and risks that sharing. Originality/value – The paper demonstrates that strategic SCM needs a balanced and rigorous combination of theoretical approaches to deliver more theory-driven evidences. The research combines both a qualitative analysis and a quantitative methodology that summarizes gaps and then outlines future research from a large sample of articles. This methodology is an original contribution to this field and offers some assistance for enlarging the sample of future literature reviews.
Open Access
Transportation pricing of a truckload carrier
(Elsevier, 2011) Toptal, A.; Bingöl, S. O.
Freight transportation is a major component of logistical operations. Due to the increase in global trade, fierce competition among shippers and raising concerns about energy, companies are putting more emphasis on effective management and usage of transportation services. This paper studies the transportation pricing problem of a truckload carrier in a setting that consists of a retailer, a truckload carrier and a less than truckload carrier. In this setting, the truckload carrier makes his/her pricing decision based on previous knowledge on the less than truckload carrier's price schedule and the retailer's ordering behavior. The retailer then makes a determination of his/her order quantity through an integrated model that explicitly considers the transportation alternatives, and the related costs (i.e., bimodal transportation costs) and capacities. In the paper, the retailer's replenishment problem and the truckload carrier's pricing problem are modeled and solved based on a detailed analysis. Numerical evidence shows that the truckload carrier may increase his/her gainings significantly through better pricing and there is further opportunity of savings if the truckload carrier and the retailer coordinate their decisions.
Open Access
The US fashion industry: a supply chain review
(Elsevier, 2008) Şen, A.
The fashion industry has short product life cycles, tremendous product variety, volatile and unpredictable demand, and long and inflexible supply processes. These characteristics, a complex supply chain and wide availability of data make the industry a suitable avenue for efficient supply chain management practices. The industry has also been in a transition over the last 20 years: significant consolidation in retail, majority of apparel manufacturing operations moving overseas and, more recently, increasing use of electronic commerce in retail and wholesale trade. This paper aims to review the current state of operations and recent trends across the fashion supply chain in the US. We use industry-wide data, articles from business journals, industry reviews and extensive interviews with an apparel manufacturer in California, and a major US department store chain to describe the current operational practices and how the industry is restructuring itself during the transition, focusing at the apparel manufacture and retail segments of the supply chain.