Optimal production and procurement decisions in a supply chain with an option contract and partial backordering under uncertainties

Hu, Fei; Lim, Cheng‐Chew; Lu, Zudi

doi:10.1016/j.amc.2014.01.149

Cited by 36 publications

(32 citation statements)

References 25 publications

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“…The article by Hu et al [53] considers a decentralized supply chain, with a retailer and a manufacturer, where the producer's production yield and the retailer's demand are both stochastic. At the beginning of the selling season, the retailer places an order and buys an option contract with the manufacturer.…”

Section: Approaches To Related Solutionsmentioning

confidence: 99%

Optimum Composition of Charter Contracts for the Renewal of the Fleet of Offshore Support Vessels Considering Uncertainties: A Literature Review

Souza¹,

Vaccaro²,

Rocha³

et al. 2019

IJHT

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This article reviews the literature on the Mendeley, Science Direct and Scopus databases on solutions to the optimal composition problem of offshore support charter contracts published between 2008 and 2018. This problem is relevant to the ongoing fleet renewal process, in terms of associated costs and fleet flexibility, in the context of oil and gas exploration and production. The problem is subject to uncertainties related to the demand to be met and to charter prices. The literature presents solutions that can be applied to parts of the problem, however a satisfactory integral solution was not found. The analysis of the literature and the characteristics of the problem indicate the construction of a solution multi-approach method as a viable way to treat the complexity of the problem.

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Section: Approaches To Related Solutionsmentioning

confidence: 99%

Optimum Composition of Charter Contracts for the Renewal of the Fleet of Offshore Support Vessels Considering Uncertainties: A Literature Review

Souza¹,

Vaccaro²,

Rocha³

et al. 2019

IJHT

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show abstract

“…Therefore, (A.7) is strictly positive, which means ( * ) is increasing in * . When * = − , based on Assumptions 1 and 2, the minimum value of ( * ) is obtained as Case (1). − infinitely approaches the smaller root of ( ), when the unique optimal stocking factor * over [− , ] will be the larger root of ( ) which is more than − .…”

Section: Conclusion and Future Researchmentioning

confidence: 99%

“…With rapid development of science and technology, more and more products become fashionable or seasonal goods with short sales cycle, low salvage value, and high demand uncertainty [1]. For instance, cut flowers, clothing, and even smartphones are all common products with fashionable or seasonal attributes, and inventory management of these products is crucial as well as complicated [2][3][4].…”

Section: Introductionmentioning

confidence: 99%

Optimal Ordering and Pricing Policies for Seasonal Products: Impacts of Demand Uncertainty and Capital Constraint

Shi

Fung

Guo

2016

Discrete Dynamics in Nature and Society

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With a stochastic price-dependent market demand, this paper investigates how demand uncertainty and capital constraint affect retailer's integrated ordering and pricing policies towards seasonal products. The retailer with capital constraint is normalized to be with zero capital endowment while it can be financed by an external bank. The problems are studied under a low and high demand uncertainty scenario, respectively. Results show that when demand uncertainty level is relatively low, the retailer faced with demand uncertainty always sets a lower price than the riskless one, while its order quantity may be smaller or larger than the riskless retailer's which depends on the level of market size. When adding a capital constraint, the retailer will strictly prefer a higher price but smaller quantity policy. However, in a high demand uncertainty scenario, the impacts are more intricate. The retailer faced with demand uncertainty will always order a larger quantity than the riskless one if demand uncertainty level is high enough (above a critical value), while the capital-constrained retailer is likely to set a lower price than the well-funded one when demand uncertainty level falls within a specific interval. Therefore, it can be further concluded that the impact of capital constraint on the retailer's pricing decision can be influenced by different demand uncertainty levels. Hindawi Publishing CorporationDiscrete Dynamics in Nature and Society decisions on ordering, pricing, and financing, which is not observed in existing literature. The main contributions and conclusions of this paper are as follows.(1) Studying Retailer's Integrated Decisions on Ordering, Pricing, and Financing. With introducing pricing decision into the "capital-constrained newsvendor" problem, this paper investigates the retailer's integrated ordering and pricing decisions in the presence of capital constraint. Results show that when market size is extremely small, the retailer will not borrow from the bank to order any quantity. Otherwise, it will borrow to order and its optimal order quantity and selling price can be uniquely determined.(2) Investigating the Impacts of Demand Uncertainty and Capital Constraint on Retailer's Optimal Ordering and Pricing Policies. Three models (i.e., the riskless model, uncertainty model, and uncertainty-underfunded model) are developed and in-depth comparisons of optimal solutions in three models are carried out to reveal how demand uncertainty and capital constraint affect retailer's integrated ordering and pricing policies. The problems are studied in a low and high demand uncertainty scenario, respectively, which is differentiated by an ingenious method, and plenty of conclusions are obtained through both theoretical analyses and numerical studies.The remainder of the paper is organized as follows. Section 2 presents the review of related literature. Section 3 describes the problem and provides the model notations and assumptions. Section 4 formulates three models and derives the optimal solutions. Sectio...

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“…Later, the optimal pricing and collection policies for a manufacturer-retailer are obtained in a closed-loop supply chain with complete and incomplete information about customer's demand (Wei et al 2015). Hu et al (2014) obtained optimal ordering and production policy in a twoechelon supply chain to maximize expected profit. They considered stochastic demand and production yield, while these factors, as well as price, are proposed to be common knowledge.…”

Section: Introduction and Literature Reviewmentioning

confidence: 99%

Optimal (R, Q) policy and pricing for two-echelon supply chain with lead time and retailer’s service-level incomplete information

2017

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Many studies focus on inventory systems to analyze different real-world situations. This paper considers a two-echelon supply chain that includes one warehouse and one retailer with stochastic demand and an upto-level policy. The retailer's lead time includes the transportation time from the warehouse to the retailer that is unknown to the retailer. On the other hand, the warehouse is unaware of retailer's service level. The relationship between the retailer and the warehouse is modeled based on the Stackelberg game with incomplete information. Moreover, their relationship is presented when the warehouse and the retailer reveal their private information using the incentive strategies. The optimal inventory and pricing policies are obtained using an algorithm based on bi-level programming. Numerical examples, including sensitivity analysis of some key parameters, will compare the results between the Stackelberg models. The results show that information sharing is more beneficial to the warehouse rather than the retailer.

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Optimal production and procurement decisions in a supply chain with an option contract and partial backordering under uncertainties

Cited by 36 publications

References 25 publications

Optimum Composition of Charter Contracts for the Renewal of the Fleet of Offshore Support Vessels Considering Uncertainties: A Literature Review

Optimum Composition of Charter Contracts for the Renewal of the Fleet of Offshore Support Vessels Considering Uncertainties: A Literature Review

Optimal Ordering and Pricing Policies for Seasonal Products: Impacts of Demand Uncertainty and Capital Constraint

Optimal (R, Q) policy and pricing for two-echelon supply chain with lead time and retailer’s service-level incomplete information

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