Supply chain coordination with an option contract under vendor-managed inventory
In this paper, we propose an option contract for a two‐echelon supply chain operating under vendor‐managed inventory (VMI). We find that the supply chain coordination and Pareto improvement can be achieved synchronously. As a comparison, a subsidy contract is introduced to coordinate the supply chai...
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Veröffentlicht in: | International transactions in operational research 2016-11, Vol.23 (6), p.1163-1183 |
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Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | In this paper, we propose an option contract for a two‐echelon supply chain operating under vendor‐managed inventory (VMI). We find that the supply chain coordination and Pareto improvement can be achieved synchronously. As a comparison, a subsidy contract is introduced to coordinate the supply chain. The paper further considers the influence of a replenishment tactic on the performance of the supply chain. After introducing a replenishment tactic, the supply chain can replenish the products to satisfy unmet demand during the selling season. We further use an option contract to coordinate the supply chain, and a Pareto improvement can be gained. All our findings are numerically illustrated. |
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ISSN: | 0969-6016 1475-3995 |
DOI: | 10.1111/itor.12172 |