Supply disruption is a common phenomenon in business activities. For the case where the supply disruption is predictable, the retailer should make an emergency procurement beforehand to decrease the inventory cost. For the scenario such that the happening time of the supply disruption obeys a certain common probability distribution but the ending time of the supply disruption is deterministic, based on minimizing the inventory cost and under two possible procurement strategies, we establish an emergency procurement optimization model. By considering the model solution in all cases, we establish a closed-form solution to the optimization model and provide an optimal emergency procurement policy to the retailer. Some numerical experiments are made to test the validity of the model and the effect of the involved parameters on the emergency procurement policy.
Some capital-constrained and risk-averse retailers may unable to obtain financing from banks due to insufficient collateral and high loan costs, so some retailers tend to use trade credit financing to ease their financial pressure. For the two echelon supply chain composed of a well-funded supplier and a capital-constrained retailer with risk-averse preference, a trade credit strategy model with the supplier-led is established in this paper. By analyzing both parties’ benefits, we derive the model solution and provide optimal decisions to all petitioners. The results obtained in this paper show that the optimum order quantity under the Conditional Value-at-Risk (CVaR) criterion declines w.r.t. the confidence level, and the wholesale price of the supplier increases w.r.t. the confidence level. The reason is that when the retailer makes fewer orders, the supplier will correspondingly increase the wholesale price to maximize their profit. On the other hand, the ordering policy with allowing backorder will make the retailer place fewer orders. Finally, the proposed model is indicated by the given numerical experiments.
17 May 2022 in Mathematical Problems in Engineering
For the secondary supply chain composed of a supplier with sufficient funds and a retailer with limited funds and risk aversion, to enhance the supply chain stability and comprehensively improve benefits, the supply chain members may choose to implement a supply chain’s coordination strategy. Thus, we study the following supply chain coordination problems, i.e., the supplier provides a trade credit policy and signs a buyback contract for the surplus products with the retailer. For this, based on maximizing the benefits of supply chain members, the supply chain coordination model has been established. By analyzing two participants’ benefit, the supply chain’s optimum coordination mechanism is obtained. The theoretical results are verified by numerical experiments.
31 July 2026 in European Journal of Operational Research