Supply Chain Production Decision Model Under Dual Output Uncertainty Environment

With the rapid development of high-tech industries,the electronic and communication equipment manufacturing industry of China has lost its market dominance due to the lack of core competitiveness.Especially in the semiconductor industry,in addition to uncertainties from raw material supplying,many companies are also facing multiple yield uncertainties from complex product manufacturing.This increases the enterprises' input cost and also greatly affects the supply chain operation.Therefore,based on the consideration of practical problems,this paper studies the supply chain production decision model between one supplier and one manufacturer under the double-output uncertainty.In order to highlight the characteristics of double-output uncertainty,we first analyses the production decision of decentralized supply chain under single yield uncertainty:(1)only the manufacturer's output is uncertain;(2)only the supplier's output is uncertain.Then,according to three different ordering schemes of manufacturer,we study its different decentralized decisions under dual output uncertainty.After the numerical analysis,the paper found that the double yield uncertainty affects the optimal decision and expected profit of suppliers and manufacturers differently,and found that the different order schemes of manufacturer have a great effect on expected profit of supply chain members.Finally,based on a manufacturer's ordering scheme,this paper introduces a commitment contract to reduce the risk of double-output uncertainty,and studies the production decisions and contract design of supply chain members.The results show that,revenue sharing contract and buyback contract proposed by the supplier can effectively improve the performance of supply chain,and we find a “Pareto interval”that can make the win-win situation of supply chain members.In further analysis,we also explored the impact of supplier potential costs on its contractual choices.