Title: Capacity-delivery coordination in supply chains: a cost-based approach

Authors: Lihua Chen; Alfred L. Guiffrida; Pratim Datta

Addresses: Department of Management and Marketing, West Liberty University, West Liberty, WV26074, USA ' Department of Management and Information Systems, Kent State University, Kent, Ohio 44242, USA ' Department of Management and Information Systems, Kent State University, Kent, Ohio 44242, USA

Abstract: We develop a cost-based model considering a two-stage supply chain with a buyer ordering from a supplier. The model is constructed to coordinate the supply chain by joint decisions over delivery performance and capacity management. In this model, the supplier randomly assigns a portion of his permanent capacity to the buyer and the buyer determines his order quantity accordingly. A delivery window is used to classify deliveries as early, on-time or late and is used to evaluate the delivery performance of the supplier when delivery time is governed by a truncated normal probability density function. Numerical sensitivity analyses are presented to illustrate the significant managerial implications of this model.

Keywords: supply chain coordination; delivery timeliness; capacity allocation.

DOI: 10.1504/IJOR.2018.092736

International Journal of Operational Research, 2018 Vol.32 No.3, pp.290 - 312

Received: 06 Jul 2015
Accepted: 17 Aug 2015
Published online: 29 Jun 2018 *

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