The Study Of Production And Ordering Decisions In A Random Yield Supply Chain With Demand Information Updating

The mismatch between supply and demand caused by demand uncertainty seriously restricts the improvement of supply chain performance.In order to cope with the impact of market demand fluctuations,more and more enterprises begin to use new modern information technologies such as big data and cloud computing to update demand information.Retail enterprises in supply chain mainly use the wholesale price contract to order rigidly before and after the update of demand information,and meanwhile use the option contract to obtain ordering flexibility,so as to quickly respond to the market demand change.Domestic and foreign scholars have studied supply chain management in demand information updating from different perspectives,but most of them assume that supply enterprises have deterministic yield.But in fact,influenced by the natural variation,technical level,policy change and many other factors,the yield of supply enterprises with a long production lead time often shows randomness.Although demand information updating can better match the retailer’s ordering and the consumer’s demand,random yield intensifies the mismatch between the supplier’s production and the retailer’s ordering,which brings new challenges to supply chain management under a complex and changeable business environment.Therefore,under the supply and demand two-sided mismatch,how to formulate reasonable and effective production and ordering plan to meet the uncertain market demand and reduce the inventory risk,is the key issue to be solved urgently in the current supply chain management.In the context where the demand information can be updated,this paper uses game theory and dynamic programming theory to study the production and ordering decisions in a random yield supply chain.The main contents are as follows:First,the single-stage rigid production and ordering decisions in a random yield supply chain with demand information updating.When demand information is updated,we consider a two-level supply chain consisting of a supplier who has random yield and a retailer who faces stochastic market demand.Utilizing wholesale price contract,the retailer can order in advance at a lower wholesale price before the demand information updating,or order instantaneously at a higher wholesale price after the demand information updating.In order to satisfy the retailer’s ordering,the random yield supplier will use the regular mode with imperfect yield and the emergency mode with perfect yield to produce before and after the production season.Firstly,we use the stochastic walk model to characterize the demand information updating process,and then construct the single-stage rigid production and ordering decision models in a random yield supply chain under the case of demand information no-updating and the case of demand information updating.In above two cases,the optimal decision of single-stage rigid production and ordering can be obtained by backward induction method respectively.Finally,the value of demand information updating to different members is analyzed by comparing the members’ expected profits.The theoretical and numerical results show that,the retailer will benefit from high quality demand information updating only when the wholesales price is not so high.On the other hand,the supplier will benefit more only when the quality of demand information updating is at a low level.In addition,the effects of random yield rate and wholesale price on the decision-making of supply chain members are further discussed.Second,the single-stage flexible production and ordering decisions in a random yield supply chain with demand information updating.Based on the Chapter 3,we further consider that the retailer uses call option to make single-stage flexible ordering from the supplier to meet the uncertain market demand.With demand information updating,in order to better discuss the value of call option to each member,we compare the optimal decisions and expected profits of members under the cases of the singlestage instant ordering and the single-stage flexible ordering,and obtain the conditions under which the members’ ordering strategy preferences can be the same.It is found that there exists an option exercise price threshold that affects members’ ordering policy preferences.If and only if the option exercise price threshold is at a medium level,single-stage flexible ordering or single-stage instant ordering will become the ordering strategy bias of members’ unanimous preferences.In addition,by extending the call option contract to the modified option contract which can be used for instant ordering,we found that the hybrid order covering instant ordering and flexible ordering can mitigate the double marginal effect.Third,the two-stage rigid production and ordering decisions in a random yield supply chain with demand information updating.Based on the Chapters 3 and 4,the single-stage production and ordering is extended to two-stage production and ordering,we consider the retailer can use the wholesale price contract to carry out two-stage rigid ordering before and after the demand information updating.We first construct a retailer-led Stackelberg game model,and then use backward induction method to derive the optimal decisions of two-stage rigid production and ordering.Finally,by comparing the two-stage rigid production and ordering decisions with the single-stage production and ordering decisions.We discuss the the two-stage rigid production and ordering equilibrium.It is found that there exists a critical threshold regarding wholesale price to induce members to uniformly prefer two-stage rigid ordering.Interestingly,when wholesale price becomes higher,the retailer’s ordering strategy preference changes in the direction of “single-stage instant ordering→two-stage rigid ordering→single-stage advance ordering”,while the supplier’s ordering strategy preference changes in the direction of “single-stage advance ordering→two-stage rigid ordering→single-stage instant ordering”.Fourth,the two-stage flexible production and ordering decisions in a random yield supply chain with demand information updating.On the basis of Chapter 5,we further consider that the retailer uses the wholesale price contract to make a two-stage rigid order,and simultaneously adjusts the first-stage rigid order quantity by purchasing a Call option or a Bidirection option covering both Call and Put.With the framework of demand information updating,we construct two-stage flexible production and ordering decisions models in a random yield supply chain under Call option contract and Bidirection option contract,respectively.Then,the optimal solutions under the two option contracts are obtained by backward induction.Finally,the effects of yield randomness,option contract parameters and demand information updating quality on the supply chain decisions are discussed under perfect demand information updating and imperfect demand information updating.The Bidirection option is more beneficial to the retailer when the quality of demand information updating is at a higher level.Nevertheless,only when demand information updating has a low quality,the supplier will prefer the retailer to choose the Bidirection option contract.Through the research on the rigid and flexible production and ordering decisions in a random yield supply chain with demand information updating,the theory of supply chain inventory management is further improved.