A Study On Decisions In A Supply Chain Under Joint Disruptions From Demand And Production Cost

With the globalization of economic and rapidly development of informationtechnology, the market competition has evolved to competing between supply chains fromcompeting between enterprises. While the market changes without any trends, the greatchallenge will befall to the stability of supply chain when the complicated supply chainface with the changing market. To design a steady supply chain, supply chain disruptionmanagement has become an emerging research orientation of operation management,attracting more and more attention from research and practical.Based on the former research, this paper broadens the research field of disruptionmanagement: with demand-stimulating service level, we consider the disruptions fromboth the demand and production cost. The supply chain comprise of one manufacture andone retailer, we study pricing, service level, and production quantity decision problems.First, we give a benchmark: the optimal decisions without disruptions, from centralizedsupply chain and decentralized supply chain, respectively. And then, we investigate theadjustment strategies and optimal decisions when the disruption term value in differentregions. At last, we analyze the value of disruption information by computing profitdifference, giving the attitudes that members of supply chain should have when thedisruptions value in different regions.The results show that the original production plan exhibits some robustness underdisruptions in both centralized and decentralized supply chains, especially productionquantity and demand-stimulating service level, while the original optimal pricing does not.Besides, in the centralized supply chain, attaching importance to the disruptionsinformation and adjusting the original production plan will be beneficial to the supplychain. But in the decentralized supply chain, there should be some more contracts provided by the manufacturer to ensure the stability of supply chain.