Collaborative supply chain planning under dynamic lot sizing costs with capacity decision |
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Authors: | Hongyan Li Tianhui You Xiaoyi Luo |
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Institution: | 1. School of Business Administration, Northeastern University, Shenyang 110004, P. R. China;Aarhus School of Business, Aarhus University, Aarhus V 8210, Denmark 2. School of Business Administration, Northeastern University, Shenyang 110004, P. R. China |
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Abstract: | Studies show that supply chain cooperation improves supply chain performance. However, it remains a challenge to develop and implement the realistic supply chain cooperation scheme.We investigate a two-echelon supply chain planning problem with capacity acquisition decision under asymmetric cost and demand information. A simple negotiation-based coordination mechanism is developed to synchronize production/order strategies of a supplier and a buyer. The coordination scheme shows how the supplier and the buyer modify their production and order policy in order to find a joint economic lot sizing plan, which saves the overall supply chain cost. The allocation of the cooperation benefit is determined by negotiation. Due to the complexity of the multiple periods, multiple level supply chain lot sizing with capacity decision, a heuristic algorithm is developed to find coordination solutions. Finally, the results of the numerical study indicate the performance of supply chain coordination scheme. |
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Keywords: | supply chain coordination joint economic lot sizing negotiation supply chain management capacity acquisition heuristics |
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