Supply chain coordination under financial constraints and yield uncertainty Online publication date: Tue, 19-Jan-2021
by Hongjun Peng; Tao Pang
European J. of Industrial Engineering (EJIE), Vol. 14, No. 6, 2020
Abstract: A coordination problem for a supply chain with capital constraints and yield uncertainty is considered in this paper. In order to improve the supply chain, a buyback and risk sharing (BBRS) mechanism is proposed, in which the distributor shares the supplier's yield uncertainty risk by purchasing the overproduced products or waiving the shortage penalty, and the supplier shares the distributor's demand uncertainty risk by buying back the unsold products. The results indicate that, the profits and the strategies under the BBRS are the same with those under the centralised case. In addition, the proposed BBRS mechanism has a built-in mechanism to allocate the spillover profit between the supplier and the distributor. The results also show that the BBRS can increase the production quantity. Finally, we derive the bankruptcy probabilities for both the supplier and the distributor, and the probabilities depend on their initial capitals. [Received 4 August 2018; Accepted 18 January 2020]
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the European J. of Industrial Engineering (EJIE):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com