Title: Three-stage supply chain coordination under production capacity bottleneck environment

Authors: S.P. Sarmah

Addresses: Department of Industrial Engineering and Management, IIT Kharagpur 721302, India

Abstract: In this paper, we have analysed coordination issues in a three stage supply chain consisting of a retailer, a manufacturer having limited production capacity and a supplier who supplies raw materials to the manufacturer in a deterministic situation. In the development of the model, manufacturer is considered as the channel leader. The mathematical model is developed considering setup time of the manufacturer as bottleneck for the entire supply chain. When setup time constraint becomes active, we have derived the conditions for the supplier to coordinate in the channel. Further, the relationship between setup time and utilisation rate for optimum savings of the manufacturer is derived in the coordinated channel when constraint becomes active and it is shown that they are inversely related.

Keywords: three-stage supply chains; SCM; supply chain management; inventories; supply chain coordination; setup time; lot sizes; production capacity; bottlenecks; retailers; manufacturers; suppliers; raw materials; deterministic situations; channel leaders; time constraints; utilisation rates; optimum savings; inverse relationships; logistics systems; logistics management; mathematical modelling.

DOI: 10.1504/IJLSM.2010.034428

International Journal of Logistics Systems and Management, 2010 Vol.7 No.2, pp.245 - 263

Published online: 03 Aug 2010 *

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