Study On Retailer's Order And Advanced Payment Strategies Under Unreliable Supply

Enterprises in the supply chain are involved into the predicament of unreliable supply and uncertain demand. The phenomenon of demand uncertainty is very obvious in perishable goods; the unreliable supply is mainly for capacity constraints, random yield, unreliable transportation, uncertain lead time,disruption and etc. It has been an issue of how to balance the supply and demand farthest under uncertain demand and unreliable supply.Although the researches on unreliable supply are mainly focus on inventory management, contract coordination and multiple suppliers, this paper does the research with the perspective of capital flow. The paper gets optimal joint decision of the ratio of advanced payment and order quantity.The paper is divided into the following aspects:(1) We make the optimal order decision under uncertain demand and unreliable supply, in a two-stage supply chain with one retailer and one supplier.Then we propose that retailer can help the supplier improve the reliability through advanced payment, and get the optimal joint decision of the ratio of advanced payment and order quantity. The results show that: the retailer's profit will be increased by advanced payment under some conditions.(2) We discuss the optimal joint order decision in a two-stage supply chain with one retailer and two suppliers. One supplier is reliable and the other is unreliable.We mainly study the optimal joint decision of the ratio of the advanced payment and procurement strategy after the retailer offer advanced payment to unreliable supplier to enhance its supply reliability. By assuming the parameters of supply ratio are linear in the ratio of advanced payment, we conclude that retailers will benefit more through advanced payment in some conditions.