Operational Decision-making For Consignment Competing Supply Chains

Consignment has been more and more popular and been applied in many industries successfully. In these industries, the competitions between the consignment supply chains are becoming increasingly fierce, and it also has been a long debate on the inventory decision under consignment contracting. Hence, the main content of this thesis is about the inventory control strategy of consignment supply chain and the operating decisions of competing consignment supply chains with revenue sharing.To study the inventory control strategy of consignment supply chains, two consignment modes of vendor managed consignment inventory and retailer managed consignment inventory are built. It shows that the channel performance has no difference whether the supplier or the retailer manages the consignment inventory, and the supply chain loses just or no more than 26.4% of its expected profit. What’s more, the retailer’s profit is always higher than the supplier’s profit.On the basis of the research result of the first part, based on each chain’s structure, four possible structure combination models were formulated, and Nash’s non-cooperative game and Stackelberg leadership model were implemented between the competing supply chains to study the operating decisions of competing consignment supply chains. The optimal channel decisions and performance were compared between each structure combination model. The result shows that channel’s optimal order quantity and revenue equilibriums are both related to the structures of its own and the competitor. However, the optimal retail price of the supply chain is only related to its own structure and has nothing to do with the competitor’s. In addition, the optimal retail price of a supply chain when it is integrated is always lower than that when it is decentralized. Besides, a sensitivity analysis of the optimal decisions and revenue for pure and cross demand-price elasticity is also conducted.This research improves the relevant theory of consignment supply chain, and lays a foundation for the further study on the competition consignment supply chains. At the same time, it also enriches the inventory control theory and method of consignment supply chain, providing a basis for further exploring the inventory control mechanism of consignment supply chain.