Capacity-delivery coordination in supply chains: a cost-based approach. (2018)

• Record Type: Journal Article
• Authors: Chen, Lihua; Guiffrida, Alfred L.; Datta, Pratim
• Is Part Of: International journal of operational research. Volume 32:Number 3(2018)
• Page Start: 290
• Page End: 312
• Publication Date: 2018
• Subjects: supply chain coordination -- delivery timeliness -- capacity allocation; Operations research -- Periodicals; 003.05
• Languages: English
• ISSNs: 1745-7645

Abstract

We develop a cost-based model considering a two-stage supply chain with a buyer ordering from a supplier. The model is constructed to coordinate the supply chain by joint decisions over delivery performance and capacity management. In this model, the supplier randomly assigns a portion of his permanent capacity to the buyer and the buyer determines his order quantity accordingly. A delivery window is used to classify deliveries as early, on-time or late and is used to evaluate the delivery performance of the supplier when delivery time is governed by a truncated normal probability density function. Numerical sensitivity analyses are presented to illustrate the significant managerial implications of this model.