Vendor Management Inventory with consignment contracts and the benefits of cooperative advertising

Giovanni, Pietro De; Karray, Salma; Martín‐Herrán, Guiomar

doi:10.1016/j.ejor.2018.06.031

Cited by 65 publications

(36 citation statements)

References 44 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Karray and Zaccour [23] also suggested that the demand depends not only on his/her own advertising but also on the advertising of competitors. De Giovanni [24] assessed the effects of cooperative advertising programs in bilateral monopolies. For more details, one can see [25,26] and the references therein.…”

Section: Vmi System With Cooperativementioning

confidence: 99%

Partially Smoothing and Gradient-Based Algorithm for Optimizing the VMI System with Competitive Retailers under Random Demands

Deng

Wan

2020

Mathematical Problems in Engineering

View full text Add to dashboard Cite

Vendor managed inventory (VMI) is an improved sustainable inventory management system, but it is difficult to establish and solve an integrated Stackelberg game model under the complicated practical environment. In this paper, a bilevel programming model is proposed to formulate the VMI system by taking into account the uncertainty of demand, the competition among retailers, the cooperative advertising, the shortage and holding costs, and the practical constraints. For the established stochastic model being associated with continuously random demands, a deterministic mathematical program with complementarity constraints (MPCC) is first derived by expectation method and the first-order optimality conditions of the lower-level problem. en, with a partially smoothing technique, the MPCC is solved by transforming it into a series of standard smooth optimization subproblems. Finally, owing to complexity caused by evaluating the integrals with unknown decision variables in the objective function, an efficient algorithm is developed to solve the problem based on the gradient information of model. Sensitivity analysis has been employed to reveal a number of managerial implications from the constructed model and algorithm. (1) e participation rate depends on advertising expenditures from both the manufacturer and the retailer. ere exists an optimal threshold of participation rate for the manufacturer, which can be provided by the intersection point of the manufacturer and retailer's costprofit curves. (2) e manufacturer's advertising policy is less sensitive to uncertainty of demand than the change of the retailer's advertising policy. (3) e manufacturer in the VMI system should concern about the differences caused by symmetric or asymmetric retailers.

show abstract

Section: Vmi System With Cooperativementioning

confidence: 99%

Partially Smoothing and Gradient-Based Algorithm for Optimizing the VMI System with Competitive Retailers under Random Demands

Deng

Wan

2020

Mathematical Problems in Engineering

View full text Add to dashboard Cite

show abstract

“…This research adopts similar production and purchasing functions as those introduced by [26]. In particular, the manufacturer's production and the retailer's purchasing cost functions take a quadratic form, c m (u − u) 2 /2 and c r (v − v) 2 /2, respectively.…”

Section: Characterization Of the Static Gamementioning

confidence: 99%

“…The centralized dynamic model is derived by summing up Equations (25) and (26). Since the players behave as a unique entity, the sharing parameter and the transferring price disappear.…”

Section: Centralized Solution Of the Dynamic Sc Gamementioning

confidence: 99%

See 1 more Smart Citation

Digital Supply Chain through Dynamic Inventory and Smart Contracts

Giovanni

2019

Mathematics

Self Cite

View full text Add to dashboard Cite

This paper develops a digital supply chain game, modeling marketing and operation interactions between members. The main novelty of the paper concerns a comparison between static and dynamic solutions of the supply chain game achieved when moving from traditional to digital platforms. Therefore, this study proposes centralized and decentralized versions of the game, comparing their solutions under static and dynamic settings. Moreover, it investigates the decentralized supply chain by evaluating two smart contracts: Revenue sharing and wholesale price contracts. In both cases, the firms use an artificial intelligence system to determine the optimal contract parameters. Numerical and qualitative analyses are used for comparing configurations (centralized, decentralized), settings (static, dynamic), and contract schemes (revenue sharing contract, wholesale price contract). The findings identify the conditions under which smart revenue sharing mechanisms are worth applying.Keywords: digital supply chain; smart contracts; dynamic inventory; revenue sharing contract IntroductionDespite its recent advent, supply chain (SC) management was deeply investigated in terms of vertical and horizontal relationships, multitude of tactics and strategies, and various objectives, purposes, and targets, mainly based on the maximization of profit or minimization of costs [1]. Although several contributions emphasized the need for implementing SC strategies, research is still needed to identify the best SC structure and the appropriate methodology for its analysis, especially with new technological disruptions like digitalization, Industry 4.0, and blockchains, which are deeply changing operations and supply chain management. From a methodological point of view, the literature applies both static and dynamic methods to investigate the supply chain management relationships.The static literature involves time-independent features. In each period, the models do not observe the changes in system parameters, and the main characterization involves decisions on customer demand (deterministic and random, endogenous and exogenous), vertical and horizontal competition within supply chains, and no risk involved, risk incurred by only one or few members, or risk shared between the participants [2].According to the static literature, the general concept of Nash equilibrium applies for determining the optimal solution, allowing firms to maximize a certain payoff. Starting from this general characterization, the literature proposes multitude types of scenarios including cooperative and non-cooperative settings, simultaneous and sequential decision-making (Cournot and Stackelberg games), vertical and horizontal competition, and embracing numerous areas as pricing (Bertrand's competition) or production (Cournot's competition).In contrast, the dynamic literature considers how the supply chain relationships change and evolve over time. Several subjects can be dynamically analyzed, like the word-of-mouth effect, economies of scale, uncertainty, the bull ...

show abstract

“…Another example is Trime Masters, a car seat supplier, which shortens its traditional assembly line to reduce labor cost (Li, ; Li & Wan, ). From the retailer's perspective, the main approach to increasing sales is to boost brand reputations through promotion and advertising campaigns (De Giovanni, Karray, & Martín‐Herrán, ; Karray & Martín‐Herrán, ).…”

Section: Introductionmentioning

confidence: 99%

Corporate social responsibility: The implications of cost improvement and promotion effort

Zhou

2019

Manage Decis Econ

View full text Add to dashboard Cite

We investigate the interaction of these two strategic decisions when corporate social responsibility (CSR) is incorporated into supply chain partners' decisions. Our results show that, with a noncooperative CSR scenario, the upstream manufacturer is more aggressive in investing in innovation to reduce production costs, which strategically lowers the wholesale price to retailers, and the downstream retailer is also less reluctant to engage in more promotion efforts to induce demand in comparison with a cooperative CSR scenario. Furthermore, the customer's sensitivity to promotion effort may hurt the CSR level of each party.

show abstract

Vendor Management Inventory with consignment contracts and the benefits of cooperative advertising

Cited by 65 publications

References 44 publications

Partially Smoothing and Gradient-Based Algorithm for Optimizing the VMI System with Competitive Retailers under Random Demands

Partially Smoothing and Gradient-Based Algorithm for Optimizing the VMI System with Competitive Retailers under Random Demands

Digital Supply Chain through Dynamic Inventory and Smart Contracts

Corporate social responsibility: The implications of cost improvement and promotion effort

Contact Info

Product

Resources

About