Supply Chain Coordination With Stochastic Demand Under Consignment Contract

Supply chain management is a new managerial mode for adapting to global manufacturing and drastic change of customer demand. The processes across independent companies and different functions of supply chain should be coordinated for effectively managing supply chain to optimize supply chain performance. To meet increasing individual and diverse customer needs in customer-driven market, the product life cycle is becoming shorter and shorter and the product demand is becoming stochastic. Demand and supply have been unbalanced by the coactions of stochastic product demand, conflict of interest in supply chain and uncertainty. So it is hard to coordinate the supply chain system with stochastic demand, and it is indispensable to construct effective incentive mechanism to coordinate supply chain with stochastic demand. Consignment contract is a kind of incentive mechanism to coordinate supply chain.This research was financially supported by National Science Fund for Distinguished Young Scholars and Innovative Research Groups. The background of this dissertation is the supply chain system with stochastic demand. Based on analyzing the research status quo of supply chain coordination, especially for supply chain coordination with consignment contract, supply chain coordination under different backgrounds is studied. The major research results of this dissertation falls on five aspects as follows.(1) Supply chain coordination under consignment contract with manufacturer managed inventory is studied. Following the features of consignment stock and non-consignment stock under manufacturer managed inventory, mathematical models of cooperative game problem and non-cooperative game problem under consignment and non-consignment are proposed. Cooperative game problem and non-cooperative game problem under consignment and non-consignment are solved respectively. The strategies and the performances of the supply chain and its members under consignment and non-consignment are compared in cooperative game and in non-cooperative game. The possibility of supply chain coordination under manufacturer managed inventory both in cooperative game and in non-cooperative game is considered respectively.(2) Supply chain coordination under consignment contract with vendor managed inventory is studied. Following the features of consignment stock and non-consignment stock under vendor managed inventory, mathematical models of cooperative game problem and non-cooperative game problem under consignment and non-consignment are proposed. Cooperative game problem and non-cooperative game problem under consignment and non-consignment are solved respectively. The strategies and the performances of the supply chain and its members under consignment and non-consignment are compared in cooperative game and in non-cooperative game. The possibility of supply chain coordination under vendor managed inventory is considered both in cooperative game and in non-cooperative game.(3) Supply chain coordination under consignment contract with wholesale price is studied. Firstly, the supplier provided wholesale price and consignment contract, and then, the manufacturer decided a base stock level and order policy. A Stackelberg leader-follower game model for a two-echelon supply chain supplier driven is built to describe this dynamitic decision process. We show that there is a unique analytic solution of the Stackelberg leader-follower game by backward induction. The strategies of supply chain system, the performances of the supply chain and its members and system coordination problem are studied.(4)Supply chain coordination under consignment contract with backorder penalty is studied. Firstly, the supplier provided backorder penalty and consignment contract, and then, the manufacturer decided a base stock level and order policy. A Stackelberg leader-follower game model for a two-echelon supply chain supplier driven is built to describe this dynamitic decision process. We show that there is a unique analytic solution of the Stackelberg leader-follower game by backward induction. The strategies of supply chain system, the performances of the supply chain and its members and system coordination problem are studied.(5) Coordination of consignment system with revenue sharing is considered in a two-echelon supply chain under information asymmetry of manufacturing cost. Firstly, the supplier misreports his manufacturing cost to the retailer; for each item sold, the retailer deducts a percentage from the selling price and remits the balance to the supplier according to the supplier’s manufacturing cost reported. Lastly, the supplier decides on the retail price and delivery quantity for his product, and retains ownership of the goods. A three-stage dynamitic game model is built to describe this dynamitic decision process. We show that there is a unique analytic solution in equilibrium by backward induction. The strategies of supply chain system, the performances of the supply chain and its members and the efficiency of the contract are specifically studied.