Quantitative analysis of semiconductor supply chain contracts with order flexibility under demand uncertainty: A case study

Knoblich, Konstanze; Heavey, Cathal; Williams, Peter

doi:10.1016/j.cie.2015.05.004

Cited by 14 publications

(4 citation statements)

References 26 publications

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“…Qi et al [46] took the lead in the systematic study of a supply chain consisting of a supplier and a retailer, and designed quantity discount contracts based on symmetric information and linear demand to coordinate emergencies. Knoblich and Heavey [47] used quantitative elastic contracts to match demand and capacity in the semiconductor industry. Chen et al [48] studied the coordination strategy of quantitative elastic contract under uncertain market size based on the supply chain system of single manufacturing and multiple retailers.…”

Section: Supply Chain Emergency Managementmentioning

confidence: 99%

A supply chain-oriented perspective to prevent future COVID-19: Mathematical model and experience of guaranteeing quality and safety of fresh agricultural products

Yin

Bai

Zhang

2021

Preprint

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The COVID-19 outbreak has exposed deficiencies in the supply chain of FAPs, which have also increased their vulnerability. As the COVID-19 epidemic continues to develop, the effective supply of FAPs during the epidemic prevention and control period has become a key part of the response to the epidemic in metropolitan areas. Based on the game theory, this study constructed a three-level supply chain consisting of suppliers, TPL service providers and retailers to guarantee the supply of FAPs in metropolises in the context of COVID-19 epidemic. By Stackelberg principle game theory, the optimal epidemic prevention effort level, preservation effort level, wholesale price, retail price and optimal profit result in the supply chain dominated by supplier and retailer are respectively solved. In this study, in addition to the characteristics of FAPs such as easy loss and perishable, COVID-19 epidemic factors such as virus infection coefficient and epidemic prevention efforts were fully integrated into the model to ensure the effective supply of FAPs in metropolitan areas. The main research conclusions are as follows. (i) In the context of COVID-19, compared with the wholesale prices of FAPs, the level of preservation efforts and epidemic prevention efforts will have a greater impact on the retail prices of FAPs in metropolitan areas. (ii) When the supplier is in the dominant position, the sensitivity coefficient of the quality assurance effort level is positively correlated with the optimal profit of the supplier. Compared with other members, they have stronger control ability and decision-making ability, so that their profits are greater than those of other members. (ii) Compared with suppliers who are in the leading position of guarantee and supply, when FAPs retailers are in the leading position of guarantee and supply, TPL service providers have a higher level of epidemic prevention efforts and preservation efforts for FAPs. At the same time, the quality effort level, market demand and retail price are all greater under the retailer-led guarantee. (iv) The profit of FAPs retailers is affected by the sensitivity coefficient of preservation effort level, epidemic prevention effort level and dominant guarantee status.The COVID-19 outbreak has exposed deficiencies in the supply chain of FAPs, which have also increased their vulnerability. As the COVID-19 epidemic continues to develop, the effective supply of FAPs during the epidemic prevention and control period has become a key part of the response to the epidemic in metropolitan areas. Based on the game theory, this study constructed a three-level supply chain consisting of suppliers, TPL service providers and retailers to guarantee the supply of FAPs in metropolises in the context of COVID-19 epidemic. By Stackelberg principle game theory, the optimal epidemic prevention effort level, preservation effort level, wholesale price, retail price and optimal profit result in the supply chain dominated by supplier and retailer are respectively solved. In this study, in addition to the characteristics of FAPs such as easy loss and perishable, COVID-19 epidemic factors such as virus infection coefficient and epidemic prevention efforts were fully integrated into the model to ensure the effective supply of FAPs in metropolitan areas. The main research conclusions are as follows. (i) In the context of COVID-19, compared with the wholesale prices of FAPs, the level of preservation efforts and epidemic prevention efforts will have a greater impact on the retail prices of FAPs in metropolitan areas. (ii) When the supplier is in the dominant position, the sensitivity coefficient of the quality assurance effort level is positively correlated with the optimal profit of the supplier. Compared with other members, they have stronger control ability and decision-making ability, so that their profits are greater than those of other members. (ii) Compared with suppliers who are in the leading position of guarantee and supply, when FAPs retailers are in the leading position of guarantee and supply, TPL service providers have a higher level of epidemic prevention efforts and preservation efforts for FAPs. At the same time, the quality effort level, market demand and retail price are all greater under the retailer-led guarantee. (iv) The profit of FAPs retailers is affected by the sensitivity coefficient of preservation effort level, epidemic prevention effort level and dominant guarantee status.

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Section: Supply Chain Emergency Managementmentioning

confidence: 99%

A supply chain-oriented perspective to prevent future COVID-19: Mathematical model and experience of guaranteeing quality and safety of fresh agricultural products

Yin

Bai

Zhang

2021

Preprint

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“…Contracts setting minimum order lead times for customers determine the minimum horizon with which a customer has to communicate a final order quantity to its supplier. The literature in these fields investigates the necessary conditions for supply chain partners to conclude such contracts and determines the optimal behaviour of supply chain partners for a given contractual relationship in order to study its effects on the overall supply chain performance and the distribution of risks within the supply chain (Iyer and Bergen 1997;Tsay 1999;Tsay and Lovejoy 1999;Barnes-Schuster, Bassok, and Anupindi 2006;Lutze and Özer 2008;Kim 2011;Kremer and Van Wassenhove 2014;Kim, Park, and Shin 2014;Knoblich, Heavey, and Williams 2015;Shen, Choi, and Minner 2019). The publications typically assume enough supply to fulfil the total of the demand of the customer and do not consider the possibility of a structural bias in the ADI information provided by the customer.…”

Section: Related Literaturementioning

confidence: 99%

A contract portfolio perspective on the role of customer order lead times in demand fulfilment processes with supply shortage

Seitz

Akkerman

Grunow

2021

International Journal of Production Research

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When demands exceed capacities, suppliers allocate available supply to customers based on customer importance and advance demand information. The accuracy of advance demand information interacts with the length of customer order lead times and influences overall customer service levels. In this paper, we analyse industrial contract portfolios with customer-specific terms in order to derive insights for contract portfolio management and the design of demand fulfilment processes. For this purpose, we develop a framework for analysis of contract portfolios capturing the dynamics of industrial planning processes. The framework is applied to portfolios from the semiconductor sector. Our numerical analysis shows that, in order to improve service levels, demand fulfilment processes and contract portfolio management must especially take into account the length of order lead times and the accuracy of advance demand information. Even though suppliers often prefer long order lead times, our analysis shows that demand fulfilment performance is not primarily determined by the absolute length of the order lead times but by the presence of a negative correlation with the accuracy of advance demand information in the entire contract portfolio. Consequently, these factors require increased attention in the management of contract portfolios and in the negotiation of individual contracts.

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“…A SC contract is a coordination mechanism to integrate SC partners and therefore benefit from improved operational performance. Supply chain contracts have been studied extensively in the context of traditional supply chains (Knoblich et al, 2015). Research suggests that SC contract analysis can improve both operational efficiency and SC coordination (Tang, 2006).…”

Section: Risk Sharing Contractsmentioning

confidence: 99%

“…The QF contract is a coordination tool that provides an opportunity to the buyer to revise its initial order or forecast and specifies upper and lower bounds (usually as percentages of the initial order) on the final order quantity (Karakaya and Bakal, 2013). Knoblich et al (2015) focussed on the concept of quantity flexibility in the context of different customer forecast demand behaviour. In this study, this fundamental concept of a QF contract is utilised to develop the risk sharing contract by incorporating a high price uncertainty parameter to the problem.…”

Section: Fig 1 Buyer-supplier Relationship Frameworkmentioning

confidence: 99%

Using risk sharing contracts for supply chain risk mitigation: A buyer-supplier power and dependence perspective

Ghadge

Dani

Ojha

et al. 2017

Computers & Industrial Engineering

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The paper aims to understand buyer-supplier power and dependence scenarios following a risk sharing contract. The study develops a supply chain risk sharing contract to mitigate demand uncertainty and price volatility related risks in a globalised business environment. An integer programming model is developed and analysed following an automotive case study to generate insights into buyer-supplier relationships. Multiple buyersupplier power and dependence scenarios are considered to reflect the possible leverages involved in the decision-making. The situational strength evaluated through buyer-supplier power and dependence illuminates the inherent complexity in contract negotiation. Thus there is an evident need to develop risk sharing contracts for mitigating global risks. The developed relationship framework and risk sharing contract model are expected to help SC managers in better understanding behavioural aspects during contract negotiations. The risk sharing contract model proposed here also contributes to a potentially novel perspective on existing theory in buyer-supplier power and dependence by providing a relational perspective on the dynamics of supply chain design and collaboration.

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Quantitative analysis of semiconductor supply chain contracts with order flexibility under demand uncertainty: A case study

Cited by 14 publications

References 26 publications

A supply chain-oriented perspective to prevent future COVID-19: Mathematical model and experience of guaranteeing quality and safety of fresh agricultural products

A supply chain-oriented perspective to prevent future COVID-19: Mathematical model and experience of guaranteeing quality and safety of fresh agricultural products

A contract portfolio perspective on the role of customer order lead times in demand fulfilment processes with supply shortage

Using risk sharing contracts for supply chain risk mitigation: A buyer-supplier power and dependence perspective

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