Research On Supply Chain Coordination Issues For Newsvendor-Type Products With Multiple Production And Ordering Modes

With the rapid improvement of technology, the paces of products upgrading are speeded up and the lifecycles of products become shorter and shorter. All these changes make more and more products have the attributes of fashion or seasonal goods, and thus lead the supply chain management for newsvendor-type products to be a very important part of the supply chain management field. Due to the strong timeliness and large demand uncertainty as well as low salvage value at the end of season that the newsvendor-type products hold, it is difficult to achieve the perfect coordination of the supply chain for newsvendor-type products. Consequently, how to effectively coordinate the supply chain of such products has long been a focus concerned by researchers and practitioners. Since 1990s, a lot of researches have been conducted on supply chain coordination issues which lead to the significant progress in the theory of supply chain coordination. These researches, however, mainly focus on single production mode and one order opportunity. Since the limitations of single production mode itself and the restriction of only one order opportunity, it is almost impossible for the supply chain system to forecast the market demand accurately and respond to the customers quickly. As a result, the node enterprises of supply chain will face the huge risk of dealing in such products. This dissertation mainly discusses the supply chain coordination issues for newsvendor-type products with multiple production and ordering modes. A theoretical system of supply chain coordination related to multiple modes of production and ordering is developed based on the elasticity of manufacturing and the flexibility of ordering. The main work and innovations of the dissertation are summarized as follows.1. The extensive research for supply chain coordination models with single production mode and one ordering opportunity. Firstly, the cooperative advertising problem is incorporated into the traditional supply chain models for newsvendor-type products, and the coordination of cooperative advertising model with stochastic demand in the two-echelon supply chain consisting of one manufacturer two competing retailers is developed as well. Secondly, the dissertation further incorporates two sale patterns—direct-sale channel and regional agent—into cooperative advertising model, and presents a supply chain coordination model with two sale patterns and cooperative advertising. Some important management insights are provided through the analysis of the effects of demand uncertainty and direct-sale channel on both parties' optimal advertising policies. Thirdly, by taking the lead time as a decision variable, the dissertation presents a supply chain coordination model with lead-time compression. Finally, under the assumption that the stochastic demand faced by the buyer is correlated to his selling price and both sides with asymmetric information about buyer's selling price, an incentive mechanism design model is developed in two-echelon supply chain by using principal-agent theory.2. Research on supply chain coordination issues with single production mode and end-of-season second order. First, under the assumption that the manufacturing setup cost of the second order (if happened) is shared by both parties and the unfilled demand at the end of the season is partially backordered, an order coordination model is presented for a single-manufacturer single-buyer supply chain. Such model not only rectifies the mistakes made by some researchers in developing the expected profit model of centralized decision system, but also expands the application range of existing models. Then, the above model is further extended to the case with multiple buyers, and the effect of competition among buyers on the optimal order policies of centralized- and decentralized decision system is investigated as well. This dissertation is the first to integrate the two-warehouse inventory problem with stochastic demand. It proposes a coordination model for newsvendor-type products with two ordering opportunities. Also, this dissertation explores the extension of the stochastic coordination model with two warehouses to the cases of partial backordering and fixed ordering cost for the emergency replenishment, advertising-dependent demand, and price-sensitive demand. These models overcomes the flaws that the existing supply chain coordination model for newsvendor-type products are only fit for the available warehouse with unlimited storage capacity.3. Research on supply chain coordination issues with single production model and in-season second order. This dissertation is the first to incorporate the demands correlation between two periods into the supply chain models with the second order happening in the interior of the season. A supply chain coordination model for newsvendor-type products with two ordering opportunities and correlated demands is developed and the closed-form solution to the model is presented as well, which covers the shortcoming that the existing related models are only suitable for the case of independent demands between two periods and can only provide the numerical solutions. In addition, the existing models related to the in-season second order are not applicable to the case with the fixed ordering cost of the buyer and set-up cost of the manufacturer. In view of the wide existence of such two costs in reality, this dissertation further generalizes the model mentioned above by considering the ordering cost and set-up cost, and presents a more complicated but more practical supply chain coordination model for newsvendor-type products. Since the complexity of structure of the model, the closed-form solution is provided by means of (5, 5) policy. At the same time, an improved revenue-sharing contract is proposed to realize the perfect coordination of the supply chain.4. Research on supply chain coordination issues with two production modes and end-of-season second order. First, the two-mode production is introduced into the supply chain with the second order happening at the end of the season, and a coordination model of order decision and production planning with two production modes is developed. This model avoids the problem of being lack of manufacturing flexibility led by adopting the single production mode proposed by existing related models. Second, this dissertation incorporates the advertising investment and two production modes into supply chain coordination models with end-of-season emergency order, and presents a supply chain model for coordinating producing and ordering as well as advertising decisions simultaneously. Third, this dissertation further extends the models above by considering the combined effect of advertising and pricing on demand. Unlike the existing literature, this dissertation puts forward the notions of advertising influence factor and pricing influence factor, and utilizes the different combination ways of such two factors, i.e., multiplicative form or an additive form, to depict the market demand. A supply chain coordination model is presented for simultaneously determining the production/ordering, advertising and pricing policies, and a combined contract of return policy and sales rebate/penalty policy is proposed to achieve perfect coordination of the supply chain. Fourth, the two-warehouse inventory problem is incorporated into the supply chain coordination models for newsvendor-type products with two production modes and two ordering opportunities. The corresponding model is developed and further extended to the cases of partial backordering and fixed ordering cost for the emergency replenishment, advertising-dependent demand, and price-sensitive demand.5. Research on supply chain coordination issues with two production modes and in-season second order. The existing models related to the in-season second order all assumed that the manufacturer adopted the single production mode to respond to the buyer's two different orders. Such assumption not only limits the applied areas of the existing models, but also ignores the production flexibility of the manufacturer in reality. Thus, this dissertation first incorporates the two production modes into the supply chain models with the second order happening in the interior of the season, and presents a supply chain coordination model with two-mode production and correlated demands. Moreover, this dissertation further extends the model above by considering the ordering cost and set-up cost. Based on an overall consideration of two production modes, two ordering opportunities, correlated demands between two periods and fixed ordering and set-up costs, a complex but practical supply chain coordination model for newsvendor-type products is built, and the closed-form solution is provided by virtue of (s, S) policy.6. Research on the supply chain coordination issues based on demand information updating. Firstly, by thinking of the second order moment as the decision variable, this dissertation presents a supply chain coordination model with demand information updating, which overcomes the flaws that the existing models fix the moment of information updating randomly. Secondly, this dissertation introduces the return behavior of the customers into the supply chain coordination model with demand information updating, and discusses the effect of the customers' return rate on the optimal moment of information updating and the optimal order quantities of the buyer as well as the optimal production quantities of the manufacturer between two periods before the season. Finally, under the assumption that the buyer could comprehensively apply two measures, i.e., the demand information updating before the start of the season and the emergency order at the end of season, to reduce the mismatch between the supply and demand, a supply chain coordination model with information updating and partial backlogging is developed, and the effect of partial backlogging rate on the optimal policies of two parties and the performance of the supply chain is explored as well.The above research results not only enrich the content of supply chain coordination theory for newsvendor-type products but also widen the application range of the traditional supply chain models, and provide more sufficient scientific evidence for decision makers of supply chain management.