Business, Management and Accounting › Management Information Systems

Supply Chain and Inventory Management

Works Count: 51693

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Description

This cluster of papers focuses on the coordination and information sharing in supply chains, including topics such as inventory management, revenue management, dynamic pricing, demand forecasting, contracting, and risk management. It explores the challenges and strategies for achieving coordination and efficiency in dual-channel supply chains through various contract types and information sharing mechanisms.

Keywords

Supply Chain Coordination; Information Sharing; Inventory Management; Revenue Management; Channel Coordination; Dynamic Pricing; Demand Forecasting; Contracting; Risk Management; Dual-Channel Supply Chains

Supply chain design and analysis:

1998-08-01

Benita M. Beamon

The Value of Information Sharing in a Two-Level Supply Chain

2000-05-01

Hau L. Lee , Kut C. So , Christopher S. Tang

Many companies have embarked on initiatives that enable more demand information sharing between retailers and their upstream suppliers. While the literature on such initiatives in the business press is proliferating, … Many companies have embarked on initiatives that enable more demand information sharing between retailers and their upstream suppliers. While the literature on such initiatives in the business press is proliferating, it is not clear how one can quantify the benefits of these initiatives and how one can identify the drivers of the magnitudes of these benefits. Using analytical models, this paper aims at addressing these questions for a simple two-level supply chain with nonstationary end demands. Our analysis suggests that the value of demand information sharing can be quite high, especially when demands are significantly correlated over time.

Survey of Literature on Continuously Deteriorating Inventory Models

1991-01-01

Fred Raafat

Coordinated supply chain management

1996-10-01

Douglas J. Thomas , Paul M. Griffin

Economic production quantity model for items with imperfect quality

2000-03-01

Moueen K. Salameh , Mohamad Y. Jaber

Recent trends in modeling of deteriorating inventory

2001-10-01

S.K. Goyal , Bibhas C. Giri

An integrated inventory model for a single supplier-single customer problem

1977-01-01

S.K. Goyal

SUMMARY SUMMARY The method given in this paper is typically applicable to those inventory problems where a product is procured by a single customer from a single supplier. An example … SUMMARY SUMMARY The method given in this paper is typically applicable to those inventory problems where a product is procured by a single customer from a single supplier. An example has been solved to illustrate the method.

Vendor selection criteria and methods

1991-01-01

Charles A. Weber , John Current , W.C. Benton

Manufacturing Flexibility: A Strategic Perspective

1993-04-01

Donald Gerwin

To help meet competitive realities operations managers need to know more about the strategic aspects of manufacturing flexibility. This paper takes steps toward meeting that need by critically reviewing the … To help meet competitive realities operations managers need to know more about the strategic aspects of manufacturing flexibility. This paper takes steps toward meeting that need by critically reviewing the literature and establishing a research agenda for the area. A conceptual model, which places flexibility within a broad context, helps to identify certain assumptions of theoretical studies which need to be challenged. The model also provides a basis for identifying specific flexibility dimensions. The manner in which these dimensions may limit the effectiveness of a manufacturing process, and the problems in operationalizing them are discussed. Focusing next on the neglected area of applied work, concepts are presented for analyzing whether desired amounts of flexibility are being achieved and whether the potential for flexibility built into a manufacturing process is being tapped. Once more, a procedure is outlined for altering a plant's types and amounts of flexibility over time. The research agenda, which grows out of the appraisal of theoretical and applied work, indicates the value in studying generic flexibility strategies, the flexibility dimensions, methods of delivery, ways of evaluating and changing a process's flexibility, and above all measurement problems. The conclusions indicate principles for strategic research, some of which have relevance for the development of mathematical models.

Optimal Dynamic Pricing of Inventories with Stochastic Demand over Finite Horizons

1994-08-01

Guillermo Gallego , Garrett van Ryzin

In many industries, managers face the problem of selling a given stock of items by a deadline. We investigate the problem of dynamically pricing such inventories when demand is price … In many industries, managers face the problem of selling a given stock of items by a deadline. We investigate the problem of dynamically pricing such inventories when demand is price sensitive and stochastic and the firm's objective is to maximize expected revenues. Examples that fit this framework include retailers selling fashion and seasonal goods and the travel and leisure industry, which markets space such as seats on airline flights, cabins on vacation cruises, and rooms in hotels that become worthless if not sold by a specific time. We formulate this problem using intensity control and obtain structural monotonicity results for the optimal intensity (resp., price) as a function of the stock level and the length of the horizon. For a particular exponential family of demand functions, we find the optimal pricing policy in closed form. For general demand functions, we find an upper bound on the expected revenue based on analyzing the deterministic version of the problem and use this bound to prove that simple, fixed price policies are asymptotically optimal as the volume of expected sales tends to infinity. Finally, we extend our results to the case where demand is compound Poisson; only a finite number of prices is allowed; the demand rate is time varying; holding costs are incurred and cash flows are discounted; the initial stock is a decision variable; and reordering, overbooking, and random cancellations are allowed.

A JOINT ECONOMIC‐LOT‐SIZE MODEL FOR PURCHASER AND VENDOR

1986-07-01

Avijit Banerjee

ABSTRACT In a typical purchasing situation, the issues of price, lot sizing, etc., usually are settled through negotiations between the purchaser and the vendor. Depending on the existing balance of … ABSTRACT In a typical purchasing situation, the issues of price, lot sizing, etc., usually are settled through negotiations between the purchaser and the vendor. Depending on the existing balance of power, the end result of such a bargaining process may be a near‐optimal or optimal ordering policy for one of the parties (placing the other in a position of significant disadvantage) or, sometimes, inoptimal policies for both parties. This paper develops a joint economic‐lot‐size model for a special case where a vendor produces to order for a purchaser on a lot‐for‐lot basis under deterministic conditions. The focus of this model is the joint total relevant cost. It is shown that a jointly optimal ordering policy, together with an appropriate price adjustment, can be beneficial economically for both parties or, at the least, does not place either at a disadvantage.

Diversification strategy, profit performance and the entropy measure

1985-07-01

Krishna G. Palepu

Abstract Several industrial organization studies, using diversification index measures, examined corporate diversification and economic performance and failed to find any significant relationship between them. Rumelt and other strategy researchers used … Abstract Several industrial organization studies, using diversification index measures, examined corporate diversification and economic performance and failed to find any significant relationship between them. Rumelt and other strategy researchers used a semisubjective classification scheme and uncovered a systematic relationship between diversification strategies and performance. This study combines the strengths of the index approach, namely, simplicity, objectivity and replicability, with the essential richness of Rumelt's methodology. Using the Jacquemin‐Berry entropy measure of diversification and the line‐of‐business data, this study finds that firms with predominantly related diversification show significantly better profit growth than firms with predominantly unrelated diversification.

The Distribution Free Newsboy Problem: Review and Extensions

1993-08-01

Guillermo Gallego , Ilkyeong Moon

The effect of supply chain glitches on shareholder wealth

2003-10-14

Kevin B. Hendricks , Vinod R. Singhal

Abstract This paper estimates the shareholder wealth affects of supply chain glitches that resulted in production or shipment delays. The results are based on a sample of 519 glitches announcements … Abstract This paper estimates the shareholder wealth affects of supply chain glitches that resulted in production or shipment delays. The results are based on a sample of 519 glitches announcements made during 1989–2000. Shareholder wealth affects are estimated by computing the abnormal stock returns (actual returns adjusted for industry and market‐wide influences) around the date when information about glitches is publicly announced. Supply chain glitch announcements are associated with an abnormal decrease in shareholder value of 10.28%. Regression analysis is used to identify factors that influence the direction and magnitude of the change in the stock market’s reaction to glitches. We find that larger firms experience a less negative market reaction, and firms with higher growth prospects experience a more negative reaction. There is no difference between the stock market’s reaction to pre‐1995 and post‐1995 glitches, suggesting that the market has always viewed glitches unfavorably. Capital structure (debt–equity ratio) has little impact on the stock market’s reaction to glitches. We also provide descriptive results on how sources of responsibility and reasons for glitches affect shareholder wealth.

Performance measures and metrics in a supply chain environment

2001-01-01

A. Gunasekaran , Chaitali Patel , Ercan Tırtıroğlu

Accessing information sharing and information quality in supply chain management

2006-03-28

Suhong Li , Binshan Lin

Economic Order Quantity under Conditions of Permissible Delay in Payments

1985-04-01

S.K. Goyal

Application of planning models in the agri-food supply chain: A review

2008-04-17

Omar Ahumada , J. René Villalobos

Reducing the Cost of Demand Uncertainty Through Accurate Response to Early Sales

1996-02-01

Marshall L. Fisher , Ananth Raman

Traditionally, fashion products have incurred high losses due to stockouts and inventory obsolence because long lead times coupled with a concentrated selling season force all or at least most production … Traditionally, fashion products have incurred high losses due to stockouts and inventory obsolence because long lead times coupled with a concentrated selling season force all or at least most production to be committed before demand information is available. Under a Quick Response system, lead times are shortened sufficiently to allow a greater portion of production to be scheduled in response to initial demand. We model and analyze the decisions required under Quick Response and give a method for estimating the demand probability distributions needed in our model. We applied these procedures with a major fashion skiwear firm and found that cost relative to the current informal response system was reduced by enough to increase profits by 60%. Relative to the cost that would have been incurred if no response were used, optimized response reduces cost by enough to roughly quadruple profits.

An Overview of Pricing Models for Revenue Management

2003-07-01

Gabriel R. Bitran , René Caldentey

In this paper, we examine the research and results of dynamic pricing policies and their relation to revenue management. The survey is based on a generic revenue management problem in … In this paper, we examine the research and results of dynamic pricing policies and their relation to revenue management. The survey is based on a generic revenue management problem in which a perishable and nonrenewable set of resources satisfy stochastic price sensitive demand processes over a finite period of time. In this class of problems, the owner (or the seller) of these resources uses them to produce and offer a menu of final products to the end customers. Within this context, we formulate the stochastic control problem of capacity that the seller faces: How to dynamically set the menu and the quantity of products and their corresponding prices to maximize the total revenue over the selling horizon.

The single-period (news-vendor) problem: literature review and suggestions for future research

1999-10-01

Moutaz Khouja

Optimal Policies for a Multi-Echelon Inventory Problem

2004-12-01

A. J. Clark , Herbert E. Scarf

(This article originally appeared in Management Science, July 1960, Volume 6, Number 4, pp. 475–490, published by The Institute of Management Sciences.) (This article originally appeared in Management Science, July 1960, Volume 6, Number 4, pp. 475–490, published by The Institute of Management Sciences.)

Information Distortion in a Supply Chain: The Bullwhip Effect

1997-04-01

Hau L. Lee , Vineet Padmanabhan , Seungjin Whang

Consider a series of companies in a supply chain, each of whom orders from its immediate upstream member. In this setting, inbound orders from a downstream member serve as a … Consider a series of companies in a supply chain, each of whom orders from its immediate upstream member. In this setting, inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions. This paper claims that the information transferred in the form of “orders” tends to be distorted and can misguide upstream members in their inventory and production decisions. In particular, the variance of orders may be larger than that of sales, and the distortion tends to increase as one moves upstream—a phenomenon termed “bullwhip effect.” This paper analyzes four sources of the bullwhip effect: demand signal processing, rationing game, order batching, and price variations. Actions that can be taken to mitigate the detrimental impact of this distortion are also discussed.

Dynamic Version of the Economic Lot Size Model

2004-12-01

Harvey M. Wagner , T. M. Whitin

A forward algorithm for a solution to the following dynamic version of the economic lot size model is given: allowing the possibility of demands for a single item, inventory holding … A forward algorithm for a solution to the following dynamic version of the economic lot size model is given: allowing the possibility of demands for a single item, inventory holding charges, and setup costs to vary over N periods, we desire a minimum total cost inventory management scheme which satisfies known demand in every period. Disjoint planning horizons are shown to be possible which eliminate the necessity of having data for the full N periods.

The Quantity Flexibility Contract and Supplier-Customer Incentives

1999-10-01

Andy A. Tsay

Consider a supply chain consisting of two independent agents, a supplier (e.g., a manufacturer) and its customer (e.g., a retailer), the latter in turn serving an uncertain market demand. To … Consider a supply chain consisting of two independent agents, a supplier (e.g., a manufacturer) and its customer (e.g., a retailer), the latter in turn serving an uncertain market demand. To reconcile manufacturing/procurement time lags with a need for timely response to the market, such supply chains often must commit resources to production quantities based on forecasted rather than realized demand. The customer typically provides a planning forecast of its intended purchase, which does not entail commitment. Benefiting from overproduction while not bearing the immediate costs, the customer has incentive to initially overforecast before eventually purchasing a lesser quantity. The supplier must in turn anticipate such behavior in its production quantity decision. This individually rational behavior results in an inefficient supply chain. This paper models the incentives of the two parties, identifying causes of inefficiency and suggesting remedies. Particular attention is given to the Quantity Flexibility (QF) contract, which couples the customer's commitment to purchase no less than a certain percentage below the forecast with the supplier's guarantee to deliver up to a certain percentage above. Under certain conditions, this method can allocate the costs of market demand uncertainty so as to lead the individually motivated supplier and customer to the systemwide optimal outcome. We characterize the implications of QF contracts for the behavior and performance of both parties, and the supply chain as a whole.

Modeling Supply Chain Dynamics: A Multiagent Approach*

1998-07-01

Jayashankar M. Swaminathan , Stephen F. Smith , Norman Sadeh

ABSTRACT A global economy and increase in customer expectations in terms of cost and services have put a premium on effective supply chain reengineering. It is essential to perform risk‐benefit … ABSTRACT A global economy and increase in customer expectations in terms of cost and services have put a premium on effective supply chain reengineering. It is essential to perform risk‐benefit analysis of reengineering alternatives before making a final decision. Simulation provides an effective pragmatic approach to detailed analysis and evaluation of supply chain design and management alternatives. However, the utility of this methodology is hampered by the time and effort required to develop models with sufficient fidelity to the actual supply chain of interest. In this paper, we describe a supply chain modeling framework designed to overcome this difficulty. Using our approach, supply chain models are composed from software components that represent types of supply chain agents (e.g., retailers, manufacturers, transporters), their constituent control elements (e.g., inventory policy), and their interaction protocols (e.g., message types). The underlying library of supply chain modeling components has been derived from analysis of several different supply chains. It provides a reusable base of domain‐specific primitives that enables rapid development of customized decision support tools.

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Optimal Pricing and Return Policies for Perishable Commodities

2008-01-01

Barry Alan Pasternack

This paper considers the pricing decision faced by a producer of a commodity with a short shelf or demand life. A hierarchical model is developed, and the results of the … This paper considers the pricing decision faced by a producer of a commodity with a short shelf or demand life. A hierarchical model is developed, and the results of the single period inventory model are used to examine possible pricing and return policies. The paper shows that several such policies currently in effect are suboptimal. These include those where the manufacturer offers retailers full credit for all unsold goods or where no returns of unsold goods are permitted. The paper also demonstrates that a policy whereby a manufacturer offers retailers full credit for a partial return of goods may achieve channel coordination, but that the optimal return allowance will be a function of retailer demand. Therefore, such a policy cannot be optimal in a multi-retailer environment. It is proven, however, that a pricing and return policy in which a manufacturer offers retailers a partial credit for all unsold goods can achieve channel coordination in a multi-retailer environment. This article was originally published in Marketing Science, Volume 4, Issue 2, pages 166–176, in 1985.

Supply Chain Coordination Under Channel Rebates with Sales Effort Effects

2002-08-01

Terry A. Taylor

A channel rebate is a payment from a manufacturer to a retailer based on retailer sales to end consumers. Two common forms of channel rebates are linear rebates, in which … A channel rebate is a payment from a manufacturer to a retailer based on retailer sales to end consumers. Two common forms of channel rebates are linear rebates, in which the rebate is paid for each unit sold, and target rebates, in which the rebate is paid for each unit sold beyond a specified target level. When demand is not influenced by sales effort, a properly designed target rebate achieves channel coordination and a win-win outcome. Coordination cannot be achieved by a linear rebate in a way that is implementable. When demand is influenced by retailer sales effort, a properly designed target rebate and returns contract achieves coordination and a win-win outcome. Other contracts, such as linear rebate and returns or target rebate alone, cannot achieve coordination in a way that is implementable. Contrary to the view expressed in the literature that accepting returns weakens incentives for retailer sales effort, we find that the provision of returns strengthens incentives for effort.

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Dynamic Pricing in the Presence of Inventory Considerations: Research Overview, Current Practices, and Future Directions

2003-10-01

Wedad Elmaghraby , Pınar Keskinocak

The benefits of dynamic pricing methods have long been known in industries, such as airlines, hotels, and electric utilities, where the capacity is fixed in the short-term and perishable. In … The benefits of dynamic pricing methods have long been known in industries, such as airlines, hotels, and electric utilities, where the capacity is fixed in the short-term and perishable. In recent years, there has been an increasing adoption of dynamic pricing policies in retail and other industries, where the sellers have the ability to store inventory. Three factors contributed to this phenomenon: (1) the increased availability of demand data, (2) the ease of changing prices due to new technologies, and (3) the availability of decision-support tools for analyzing demand data and for dynamic pricing. This paper constitutes a review of the literature and current practices in dynamic pricing. Given its applicability in most markets and its increasing adoption in practice, our focus is on dynamic (intertemporal) pricing in the presence of inventory considerations.

On the Value of Mitigation and Contingency Strategies for Managing Supply Chain Disruption Risks

2006-04-24

Brian Tomlin

We study a single-product setting in which a firm can source from two suppliers, one that is unreliable and another that is reliable but more expensive. Suppliers are capacity constrained, … We study a single-product setting in which a firm can source from two suppliers, one that is unreliable and another that is reliable but more expensive. Suppliers are capacity constrained, but the reliable supplier may possess volume flexibility. We prove that in the special case in which the reliable supplier has no flexibility and the unreliable supplier has infinite capacity, a risk-neutral firm will pursue a single disruption-management strategy: mitigation by carrying inventory, mitigation by single-sourcing from the reliable supplier, or passive acceptance. We find that a supplier’s percentage uptime and the nature of the disruptions (frequent but short versus rare but long) are key determinants of the optimal strategy. For a given percentage uptime, sourcing mitigation is increasingly favored over inventory mitigation as disruptions become less frequent but longer. Further, we show that a mixed mitigation strategy (partial sourcing from the reliable supplier and carrying inventory) can be optimal if the unreliable supplier has finite capacity or if the firm is risk averse. Contingent rerouting is a possible tactic if the reliable supplier can ramp up its processing capacity, that is, if it has volume flexibility. We find that contingent rerouting is often a component of the optimal disruption-management strategy, and that it can significantly reduce the firm’s costs. For a given percentage uptime, mitigation rather than contingent rerouting tends to be optimal if disruptions are rare.

Quantifying the Bullwhip Effect in a Simple Supply Chain: The Impact of Forecasting, Lead Times, and Information

2000-03-01

Frank Chen , Zvi Drezner , Jennifer K. Ryan +1 more

An important observation in supply chain management, known as the bullwhip effect, suggests that demand variability increases as one moves up a supply chain. In this paper we quantify this … An important observation in supply chain management, known as the bullwhip effect, suggests that demand variability increases as one moves up a supply chain. In this paper we quantify this effect for simple, two-stage supply chains consisting of a single retailer and a single manufacturer. Our model includes two of the factors commonly assumed to cause the bullwhip effect: demand forecasting and order lead times. We extend these results to multiple-stage supply chains with and without centralized customer demand information and demonstrate that the bullwhip effect can be reduced, but not completely eliminated, by centralizing demand information.

Lot Sizing with Random Yields: A Review

1995-04-01

Candace Arai Yano , Hau L. Lee

This paper reviews the literature on quantitatively-oriented approaches for determining lot sizes when production or procurement yields are random. We discuss issues related to the modeling of costs, yield uncertainty, … This paper reviews the literature on quantitatively-oriented approaches for determining lot sizes when production or procurement yields are random. We discuss issues related to the modeling of costs, yield uncertainty, and performance in the context of systems with random yields. We provide a review of the existing literature, concentrating on descriptions of the types of problems that have been solved and important structural results. We identify a variety of shortcomings of the literature in addressing problems encountered in practice, and suggest directions for future research.

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Information sharing in a supply chain

2000-01-01

Hau L. Lee , Seungjin Whang

Advances in information system technology have had a huge impact on the evolution of supply chain management. As a result of such technological advances, supply chain partners can now work … Advances in information system technology have had a huge impact on the evolution of supply chain management. As a result of such technological advances, supply chain partners can now work in tight coordination to optimise the chain-wide performance, and the realised return may be shared among the partners. A basic enabler for tight coordination is information sharing, which has been greatly facilitated by the advances in information technology. This paper describes the types of information shared inventory, sales, demand forecast, order status, and production schedule. We discuss how and why this information is shared using industry examples and relating them to academic research. We also discuss three alternative system models of information sharing - the information transfer model, the third party model and the information hub model.

Supply Chain Coordination with Contracts

2003-01-01

Gérard P. Cachon

Decision Bias in the Newsvendor Problem with a Known Demand Distribution: Experimental Evidence

2000-03-01

Maurice E. Schweitzer , Gérard P. Cachon

In the newsvendor problem a decision maker orders inventory before a one period selling season with stochastic demand. If too much is ordered, stock is left over at the end … In the newsvendor problem a decision maker orders inventory before a one period selling season with stochastic demand. If too much is ordered, stock is left over at the end of the period, whereas if too little is ordered, sales are lost. The expected profit-maximizing order quantity is well known, but little is known about how managers actually make these decisions. We describe two experiments that investigate newsvendor decisions across different profit conditions. Results from these studies demonstrate that choices systematically deviate from those that maximize expected profit. Subjects order too few of high-profit products and too many of low-profit products. These results are not consistent with risk-aversion, risk-seeking preferences, Prospect Theory preferences, waste aversion, stockout aversion, or the consequences of underestimating opportunity costs. Two explanations are consistent with the data. One, subjects behave as if their utility function incorporates a preference to reduce ex-post inventory error, the absolute difference between the chosen quantity and realized demand. Two, subjects suffer from the anchoring and insufficient adjustment bias. Feedback and training did not mitigate inventory order errors. We suggest techniques to improve decision making.

Value of Information in Capacitated Supply Chains

1999-01-01

Srinagesh Gavirneni , Roman Kapuściński , Sridhar Tayur

We incorporate information flow between a supplier and a retailer in a two-echelon model that captures the capacitated setting of a typical supply chain. We consider three situations: (1) a … We incorporate information flow between a supplier and a retailer in a two-echelon model that captures the capacitated setting of a typical supply chain. We consider three situations: (1) a traditional model where there is no information to the supplier prior to a demand to him except for past data; (2) the supplier knows the (s, S) policy used by the retailer as well as the end-item demand distribution; and (3) the supplier has full information about the state of the retailer. Order up-to policies continue to be optimal for models with information flow for the finite horizon, the infinite horizon discounted and the infinite horizon average cost cases. Study of these three models enables us to understand the relationships between capacity, inventory, and information at the supplier level, as well as how they are affected by the retailer’s (S − s) values and end-item demand distribution. We estimate the savings at the supplier due to information flow and study when information is most beneficial.

Revenue Management Under a General Discrete Choice Model of Consumer Behavior

2004-01-01

Kalyan Talluri , Garrett van Ryzin

Customer choice behavior, such as buy-up and buy-down, is an important phenomenon in a wide range of revenue management contexts. Yet most revenue management methodologies ignore this phenomenon—or at best … Customer choice behavior, such as buy-up and buy-down, is an important phenomenon in a wide range of revenue management contexts. Yet most revenue management methodologies ignore this phenomenon—or at best approximate it in a heuristic way. In this paper, we provide an exact and quite general analysis of this problem. Specifically, we analyze a single-leg reserve management problem in which the buyers' choice behavior is modeled explicitly. The choice model is very general, simply specifying the probability of purchase for each fare product as a function of the set of fare products offered. The control problem is to decide which subset of fare products to offer at each point in time. We show that the optimal policy for this problem has a quite simple form. Namely, it consists of identifying an ordered family of “efficient“ subsets S 1 , …, S m , and at each point in time opening one of these sets S k , where the optimal index k is increasing in the remaining capacity x and decreasing in the remaining time. That is, the more capacity (or less time) available, the further the optimal set is along this sequence. We also show that the optimal policy is a nested allocation policy if and only if the sequence of efficient sets is nested, that is S 1 ⊆ S 2 ⊆ … ⊆S m . Moreover, we give a characterization of when nesting by fare order is optimal. We also develop an estimation procedure for this setting based on the expectation-maximization (EM) method that jointly estimates arrival rates and choice model parameters when no-purchase outcomes are unobservable. Numerical results are given to illustrate both the model and estimation procedure.

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Selling to the Newsvendor: An Analysis of Price-Only Contracts

2001-10-01

Martin A. Lariviere , Evan L. Porteus

We consider a simple supply-chain contract in which a manufacturer sells to a retailer facing a newsvendor problem and the lone contract parameter is a wholesale price. We develop a … We consider a simple supply-chain contract in which a manufacturer sells to a retailer facing a newsvendor problem and the lone contract parameter is a wholesale price. We develop a mild restriction satisfied by many common distributions that assures that the manufacturer's problem is readily amenable to analysis. The manufacturer's profit and sales quantity increase with market size, but the resulting wholesale price depends on how the market grows. For the cases we consider, we identify relative variability (i.e., the coefficient of variation) as key: As relative variability decreases, the retailer's price sensitivity decreases, the wholesale price increases, the decentralized system becomes more efficient (i.e., captures a greater share of potential profit), and the manufacturer's share of realized profit increases. Decreasing relative variability, however, may leave the retailer severely disadvantaged as the higher wholesale price reduces his profitability. We explore factors that may lead the manufacturer to set a wholesale price below that which would maximize her profit, concentrating on retailer participation in forecasting and retailer power. As these and other considerations can result in a wholesale price below what we initially suggest, our base model represents a worst-case analysis of supply-chain performance.

Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations

2005-01-01

Gérard P. Cachon , Martin A. Lariviere

Under a revenue-sharing contract, a retailer pays a supplier a wholesale price for each unit purchased, plus a percentage of the revenue the retailer generates. Such contracts have become more … Under a revenue-sharing contract, a retailer pays a supplier a wholesale price for each unit purchased, plus a percentage of the revenue the retailer generates. Such contracts have become more prevalent in the videocassette rental industry relative to the more conventional wholesale price contract. This paper studies revenue-sharing contracts in a general supply chain model with revenues determined by each retailer's purchase quantity and price. Demand can be deterministic or stochastic and revenue is generated either from rentals or outright sales. Our model includes the case of a supplier selling to a classical fixed-price newsvendor or a price-setting newsvendor. We demonstrate that revenue sharing coordinates a supply chain with a single retailer (i.e., the retailer chooses optimal price and quantity) and arbitrarily allocates the supply chain's profit. We compare revenue sharing to a number of other supply chain contracts (e.g., buy-back contracts, price-discount contracts, quantity-flexibility contracts, sales-rebate contracts, franchise contracts, and quantity discounts). We find that revenue sharing is equivalent to buybacks in the newsvendor case and equivalent to price discounts in the price-setting newsvendor case. Revenue sharing also coordinates a supply chain with retailers competing in quantities, e.g., Cournot competitors or competing newsvendors with fixed prices. Despite its numerous merits, we identify several limitations of revenue sharing to (at least partially) explain why it is not prevalent in all industries. In particular, we characterize cases in which revenue sharing provides only a small improvement over the administratively cheaper wholesale price contract. Additionally, revenue sharing does not coordinate a supply chain with demand that depends on costly retail effort. We develop a variation on revenue sharing for this setting.

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Pricing and the Newsvendor Problem: A Review with Extensions

1999-04-01

Nicholas C. Petruzzi , Maqbool Dada

In the newsvendor problem, a decision maker facing random demand for a perishable product decides how much of it to stock for a single selling period. This simple problem with … In the newsvendor problem, a decision maker facing random demand for a perishable product decides how much of it to stock for a single selling period. This simple problem with its intuitively appealing solution is a crucial building block of stochastic inventory theory, which comprises a vast literature focusing on operational efficiency. Typically in this literature, market parameters such as demand and selling price are exogenous. However, incorporating these factors into the model can provide an excellent vehicle for examining how operational problems interact with marketing issues to influence decision making at the firm level. In this paper we examine an extension of the newsvendor problem in which stocking quantity and selling price are set simultaneously. We provide a comprehensive review that synthesizes existing results for the single period problem and develop additional results to enrich the existing knowledge base. We also review and develop insight into a dynamic inventory extension of this problem, and motivate the applicability of such models.

Contracting to Assure Supply: How to Share Demand Forecasts in a Supply Chain

2001-05-01

Gérard P. Cachon , Martin A. Lariviere

Forecast sharing is studied in a supply chain with a manufacturer that faces stochastic demand for a single product and a supplier that is the sole source for a critical … Forecast sharing is studied in a supply chain with a manufacturer that faces stochastic demand for a single product and a supplier that is the sole source for a critical component. The following sequence of events occurs: the manufacturer provides her initial forecast to the supplier along with a contract, the supplier constructs capacity (if he accepts the contract), the manufacturer receives an updated forecast and submits a final order. Two contract compliance regimes are considered. If the supplier accepts the contract under forced compliance then he has little flexibility with respect to his capacity choice; under voluntary compliance, however, he maintains substantial flexibility. Optimal supply chain performance requires the manufacturer to share her initial forecast truthfully, but she has an incentive to inflate her forecast to induce the supplier to build more capacity. The supplier is aware of this bias, and so may not trust the manufacturer's forecast, harming supply chain performance. We study contracts that allow the supply chain to share demand forecasts credibly under either compliance regime.

Optimal Lot Sizing, Process Quality Improvement and Setup Cost Reduction

1986-02-01

Evan L. Porteus

This paper seeks to demonstrate that lower setup costs can benefit production systems by improving quality control. It does so by introducing a simple model that captures a significant relationship … This paper seeks to demonstrate that lower setup costs can benefit production systems by improving quality control. It does so by introducing a simple model that captures a significant relationship between quality and lot size: while producing a lot, the process can go "out of control" with a given probability each time it produces another item. Once out of control, the process produces defective units throughout its production of the current lot. The system incurs an extra cost for rework and related operations for each defective piece that it produces. Thus, there is an incentive to produce smaller lots, and have a smaller fraction of defective units. The paper also introduces three options for investing in quality improvements: (i) reducing the probability that the process moves out of control (which yields fewer defects, larger lot sizes, fewer setups, and larger holding costs); (ii) reducing setup costs (which yields smaller lot sizes, lower holding costs, and fewer defects); and (iii) simultaneously using the two previous options. By assuming a specific form of the investment cost function for each option, we explicitly obtain the optimal investment strategy. We also briefly discuss the sensitivity of these solutions to changes in underlying parameter values. A numerical example illustrates the results.

Channel Conflict and Coordination in the E‐Commerce Age

2004-01-03

Andy A. Tsay , Narendra Agrawal

A number of factors, including developments in Internet‐based commerce and third‐party logistics, have led many companies to consider engaging in direct sales. Such a company may at once be both … A number of factors, including developments in Internet‐based commerce and third‐party logistics, have led many companies to consider engaging in direct sales. Such a company may at once be both a supplier to and a direct competitor of any existing reseller partners (e.g., land‐based retailers), which can result in “channel conflict.” This can have momentous implications for distribution strategy. To generate managerial insights into this important issue, we develop a model that captures key attributes of such a setting, including various sources of inefficiency. We examine these in detail and identify a number of counterintuitive structural properties. For instance, the addition of a direct channel alongside a reseller channel is not necessarily detrimental to the reseller, given the associated adjustment in the manufacturer's pricing. In fact, both parties can benefit. Finally, we examine ways to adjust the manufacturer‐reseller relationship that have been observed in industry. These include changes in wholesale pricing, paying the reseller a commission for diverting customers toward the direct channel, or conceding the demand fulfillment function entirely to the reseller. The latter two schemes could be mutually beneficial in that they achieve a division of labor according to each channel's competitive advantage.

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Supply Chain Inventory Management and the Value of Shared Information

2000-08-01

Gérard P. Cachon , Marshall L. Fisher

In traditional supply chain inventory management, orders are the only information firms exchange, but information technology now allows firms to share demand and inventory data quickly and inexpensively. We study … In traditional supply chain inventory management, orders are the only information firms exchange, but information technology now allows firms to share demand and inventory data quickly and inexpensively. We study the value of sharing these data in a model with one supplier, N identical retailers, and stationary stochastic consumer demand. There are inventory holding costs and back-order penalty costs. We compare a traditional information policy that does not use shared information with a full information policy that does exploit shared information. In a numerical study we find that supply chain costs are 2.2% lower on average with the full information policy than with the traditional information policy, and the maximum difference is 12.1%. We also develop a simulation-based lower bound over all feasible policies. The cost difference between the traditional information policy and the lower bound is an upper bound on the value of information sharing: In the same study, that difference is 3.4% on average, and no more than 13.8%. We contrast the value of information sharing with two other benefits of information technology, faster and cheaper order processing, which lead to shorter lead times and smaller batch sizes, respectively. In our sample, cutting lead times nearly in half reduces costs by 21% on average, and cutting batches in half reduces costs by 22% on average. For the settings we study, we conclude that implementing information technology to accelerate and smooth the physical flow of goods through a supply chain is significantly more valuable than using information technology to expand the flow of information.

Revenue Management: Research Overview and Prospects

1999-05-01

Jeff McGill , Garrett J. van Ryzin

This survey reviews the forty-year history of research on transportation revenue management (also known as yield management). We cover developments in forecasting, overbooking, seat inventory control, and pricing, as they … This survey reviews the forty-year history of research on transportation revenue management (also known as yield management). We cover developments in forecasting, overbooking, seat inventory control, and pricing, as they relate to revenue management, and suggest future research directions. The survey includes a glossary of revenue management terminology and a bibliography of over 190 references.

The Bullwhip Effect in Supply Chains

1997-03-22

Hau L. Lee , Vineet Padmanabhan , Seungjin Whang

An EOQ Model for Items with Weibull Distribution Deterioration

1973-12-01

Richard P. Covert , George C. Philip

Abstract An inventory model is considered for deteriorating items with a variable rate of deterioration, where deterioration means decay, damage or spoilage such that the item cannot be used for … Abstract An inventory model is considered for deteriorating items with a variable rate of deterioration, where deterioration means decay, damage or spoilage such that the item cannot be used for its original purpose. Specifically, the Weibull distribution is used to represent the distribution of the time to deterioration. The EOQ formula is derived under conditions of constant demand, instantaneous delivery and no shortages, and it is shown that the results can be related to previously developed simpler models. A computer program is developed to provide the numerical solution and a numerical example is used to show the solution form and verify that the solution gives minimum total cost per unit time. An economic lot size model has been developed for situation in which the deterioration follows a Weibull distribution. The theoretical derivation was shown to reduce to the previous model found by Ghare and Schrader when the deterioration was exponential in nature and to a non deteriorating EOQ model when deterioration was made very small. A computer program was developed to provide a numerical solution and its use demonstrated on a numerical example. The computer program is available from the authors.

Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods

1971-01-01

J. Gragg

Stable-Baselines3: Reliable Reinforcement Learning Implementations

2021-01-01

Antonin Raffin , Ashley Hill , Adam Gleave +3 more

Dynamic Version of the Economic Lot Size Model

1958-10-01

Harvey M. Wagner , T. M. Whitin

Safety Pressure Effects in a Mechanical Demand Regulator

2025-06-25

Barbara E. Shykoff , DeAnne C. French , Dan E. Warkander +1 more | Aerospace Medicine and Human Performance

INTRODUCTION: Most U.S. Navy, but few U.S. Air Force, tactical jets use safety pressure (SP) regulators. SP effects have been studied only with confounding differences in regulator design. We compared … INTRODUCTION: Most U.S. Navy, but few U.S. Air Force, tactical jets use safety pressure (SP) regulators. SP effects have been studied only with confounding differences in regulator design. We compared a CRU-103 SP regulator to a CRU-103 with SP removed. The hypothesis was that SP does not alter breathing, only shifts pressure more positive. METHODS: Inspiratory flows and mask and hose pressures were measured in 24 subjects (29 for speech at rest, 31 for lung volumes) who breathed in counterbalanced order from both regulators while blind to SP condition. RESULTS: Both were easy to breathe. Neither was preferred overall. Between regulators, end-expiratory lung volume did not differ. SP stabilized hose pressure and favored inspiration: without speech, hose pressure swings were significantly lower (rest: 25%, exercise: 33%), as were inspiratory work of breathing at rest (33%) and peak inspiratory flow magnitude (rest: 14%; exercise: 11%). Waveforms showed interactions of mask valves and SP at the start and end of expiration. Mask leaks with SP activated the regulator during speech. DISCUSSION: SP as implemented in the CRU-103 causes mostly subtle differences in pressures and flows. The sensed difference during expiration may result from the initial large pressure gradient for expiratory flow. Shykoff BE, French DC, Warkander DE, Robinson FE. Safety pressure effects in a mechanical demand regulator . Aerosp Med Hum Perform. 2025; 96(7):547–555.

Decision and coordination of a fuzzy closed-supply chain with collection and return policy

2025-06-24

Panpan Li , Baojun Zhang , Zheng Zhang | RAIRO - Operations Research

This paper examines the decision-making and coordination issues within a closed-loop supply chain (CLSC) that incorporates a return policy and product collection in a fuzzy environment. As the CLSC often … This paper examines the decision-making and coordination issues within a closed-loop supply chain (CLSC) that incorporates a return policy and product collection in a fuzzy environment. As the CLSC often operate under uncertain environment, triangular fuzzy variables are employed to represent parameters, including potential demand, return quantities, and transfer payments. By using game-theoretic methods, we develop centralized and decentralized decision-making models in both deterministic and fuzzy environments, and apply a recycling effort cost-sharing contract to coordinate the CLSC. We then compare the equilibrium outcomes across different models in both environments and find that, relative to the deterministic setting, the collection rate and profit of the CLSC are enhanced in the fuzzy environment, even under the same decision model. An interesting observation is made: when the fuzziness in the refund price sensitivity parameter changes, the manufacturer’s expected profit is affected more significantly than that of the retailer. Furthermore, our analysis reveals that, within the decentralized decision-making model, the recycling effort cost-sharing contract can achieve a win-win scenario for both the manufacturer and the retailer.

Disclosing Low Product Availability: An Online Platform’s Strategy for Mitigating Stockout Risk

2025-06-23

Benjamin Knight , Dmitry Mitrofanov | Management Science

Ensuring product availability and successful order fulfillment are critical priorities for any retail company. In this paper, we explore how sharing information about low-availability items (LAIs) can influence customer purchase … Ensuring product availability and successful order fulfillment are critical priorities for any retail company. In this paper, we explore how sharing information about low-availability items (LAIs) can influence customer purchase decisions both in preventing stockouts and mitigating their negative effects. The net impact of sharing information on LAIs is difficult to predict ex ante because multiple effects may act in opposite directions. On the one hand, sharing information could discourage LAI purchases from customers who are averse to stockouts. On the other hand, such information might increase the demand for LAIs because of cognitive biases that make scarce items seem more appealing. In a field experiment with more than 840,000 Instacart customers, we first find that customers are 25% less likely to purchase LAIs when item availability information is disclosed. This effect is not uniform; it is more pronounced when customers shop at new stores, when they have previously encountered lower found rates on the platform, and when they have less experience using the platform. Importantly, LAI disclosure has a positive impact on the platform’s performance in both the short and long term. Specifically, this innovative and extremely low-cost policy results in a 5.8% increase in customer spending and a 5.7% increase in order frequency over the long term. Our analysis suggests that this positive effect is driven by several factors: the improved service quality experienced by customers, as evidenced by a 3.7% reduction in refunds, a 2.9% decrease in product replacements, and a 7.5% reduction in poor product replacement ratings when replacements do occur; increased customer exploration of different stores; and higher spending per order because of fewer refunds and the exploration of potentially more expensive product substitutes. In the context of online retail, a policy of disclosing LAIs can improve customer decision-making by providing stock information, reduce stockouts, enhance satisfaction by managing expectations and transparency, and promote exploration of more platform options. This paper was accepted by Victor Martinez de Albéniz, operations management. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.01808 .

Does risk aversion decrease the order quantity?

2025-06-23

Yuge Bai , M. H. Gu | Optimization Letters

EOQ model with defective products, batch shipment and partial backorders

2025-06-22

Harun Öztürk , Ioannis Konstantaras | Annals of Operations Research

Abstract The existing literature on the economic order quantity (EOQ) problem with backordering does not address the impact of batch shipments on backordering behavior in a business to customer (B2C) … Abstract The existing literature on the economic order quantity (EOQ) problem with backordering does not address the impact of batch shipments on backordering behavior in a business to customer (B2C) environment. This study develops inventory models for a retailer receiving batch shipments and managing inventory through backorders. In this scenario, a large quantity of items is received, some of which are found to be defective. To identify defective items, the retailer conducts a 100% inspection of the goods received. Once inspected, the saleable products are added to the warehouse inventory in batches, rather than individually. The retailer follows a policy of receiving equal-sized batches at regular time intervals, deciding on the number of batches, as well as the ordering and backordering quantities. The analysis explores two approaches for handling defective products, incorporating time-proportioning for the backordering cost and a penalty cost for each lost unit. The classical optimization technique is applied to determine the optimal policy. A numerical example demonstrates the theory, with results showing that partial recovery of customer loyalty and product repair are more profitable approaches.

Investigation of a Green Production Inventory Model with Stock-Dependent Production Rate Under Preservation Investment and Artificial Ecosystem-Based Optimizer

2025-06-21

Hachen Ali , Gobinda Chandra Panda , Ali Akbar Shaikh +1 more | Environmental Modeling & Assessment

Introduction of a Buy-online-and-pick-up-in-store Channel: An Analysis in a Multi-channel Supply Chain System

2025-06-20

Mritunjoy Saha , Raghu Nandan Giri | Journal of Systems Science and Systems Engineering

EXPRESS: Robust Monopoly Pricing with Asymmetric Information

2025-06-20

Zhou Chen , Simai He , Zhen Wang +1 more | Production and Operations Management

This study investigates a robust monopoly pricing problem, where a seller seeks tomaximize expected revenue when selling a product to a buyer with limited information, specifically knowing only the mean, … This study investigates a robust monopoly pricing problem, where a seller seeks tomaximize expected revenue when selling a product to a buyer with limited information, specifically knowing only the mean, variance, and asymmetric information (semivariance) of the buyer’s valuation distribution. We explore both deterministic and randomized pricing strategies and evaluate their performance under these constraints. We formulate two maximin problems aimed at maximizing the worst-case expected revenues. By employing the primal-dual approach in infinite linear programming, we derive the closed-form for the optimal pricing strategies for both maximin problems. Our results show that incorporating semivariance significantly enhances the performance of pricing strategies by better capturing distributional asymmetry. Additionally, we compare the performance of deterministic and randomized pricing in various scenarios, offering valuable insights into how risk and reward can be effectively balanced. Moreover, our results on both pricing strategies provide new bounds for the value of personalized pricing. This comprehensive analysis enables a deeper understanding of semivariance information to improve decision-making and offer practical insights for managing complex pricing decisions.

Optimal Utilization of Port-free-of-charge for Inventory Management with Inflation, Preservation Technology, and Carbon Emissions

2025-06-20

Anthony Limi , K. Rangarajan | Process Integration and Optimization for Sustainability

Uncertainty-cognizant post-disaster routing with progressive hedging centered multi meta-heuristic approach

2025-06-19

Suyash Pratap , H. M. Abdul Aziz | Transportation Research Part E Logistics and Transportation Review

Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated Products

2025-06-19

Pak Hou , Yue Chen | Mathematics

Probabilistic selling is a retail strategy in which consumers purchase products without knowing their exact identities until after purchase, with various applications like gaming and retail; a real-world practice involves … Probabilistic selling is a retail strategy in which consumers purchase products without knowing their exact identities until after purchase, with various applications like gaming and retail; a real-world practice involves retailers may unsealing and reselling goods to meet consumer demand for transparency. This disrupts manufacturers’ strategies designed to adopt the uncertainty for segmentation and pricing. Using a vertically differentiated supply chain model structured as a Stackelberg game framework, this study examines how transparency from retailer unsealing affects profitability, consumer surplus, and market dynamics. Key findings include the following: (1) Unsealing increases retailer profits by aligning pricing with heterogeneous consumer willingness to pay. (2) Introducing a manufacturer’s direct channel reduces unsealing profits via price competition. (3) Unsealing creates conflicts between manufacturers’ design goals and retailers’ profit-driven incentives. By applying a Stackelberg game framework to model unsealing as a downstream transparency decision, this work advances the probabilistic selling literature by offering a structured approach to analyzing how downstream transparency and retailer strategies reshape probabilistic selling and supply chain dynamics. It highlights the need for manufacturers to balance segmentation, pricing, and channel control, offering insights into mitigating conflicts between design intentions and downstream market behaviors.

Improving network dynamic pricing policies through offline reinforcement learning

2025-06-19

Philipp Hausenblas , Dominik Eichhorn , Andreas Brieden +2 more | OR Spectrum

Risk Analysis in Basestock Inventory Systems under Short-Term Fill Rate Audits

2025-06-18

Jakub Wojtasik , Joanna Bruzda , Babak Abbasi | IISE Transactions

Comparative Analysis of Reinforcement Learning Approaches for Dynamic Pricing of Perishable Goods

2025-06-18

Murali Krishna Panthangi , Vasudevan VN | Research Square (Research Square)

<title>Abstract</title> Dynamic pricing of perishable products is a challenging optimization problem with limited shelf life, random demand, and inventory capacity constraints. Fixed or rule-based price policies fail to change in … <title>Abstract</title> Dynamic pricing of perishable products is a challenging optimization problem with limited shelf life, random demand, and inventory capacity constraints. Fixed or rule-based price policies fail to change in response to market movements and do not yield maximum revenue. In this research, we consider the use of reinforcement learning (RL) techniques for learning adaptive price policies that maximize profitability and inventory usage. We train and contrast four leading RL methods Deep Q-Networks(DQN), Double DQN(DDQN), Proximal Policy Optimization(PPO) and Quantile Regression DQN(QR-DQN) in a simulated retail setting with price and age sensitivity in demand. We compare the RL agents to fixed-price policies in order to measure revenue, inventory loss, and pricing conduct. Our findings show that PPO attains the maximum revenue with minimal waste, performing better than both baselines and other learning-based methods.

Approximated Optimal Solution for Economic Manufacturing Quantity Model

2025-06-18

Jinyuan Liu , Pengfei Jiang , Simone Hu +1 more | Mathematics

This study investigates the use of the bisection algorithm in inventory models to obtain an approximated optimal solution for the economic manufacturing quantity (EMQ) problem under imperfect production conditions. The … This study investigates the use of the bisection algorithm in inventory models to obtain an approximated optimal solution for the economic manufacturing quantity (EMQ) problem under imperfect production conditions. The objectives are threefold. First, we utilize refined estimations of exponential functions to provide tighter lower and upper bounds for the bisection algorithm. Second, we propose three analytical improvements that simplify the solution process, each supported by rigorous proofs. Third, we incorporate recent results from the literature to further enhance the accuracy of exponential function approximations within the EMQ model. Our improved bounding approach significantly reduces the search interval needed by the bisection method and yields an approximate solution that attains a total cost very close to the true optimum. In a numerical example, the proposed method shrinks the initial search range by over 99% compared to prior methods and achieves a production run length that produces a near-minimal average total cost. These findings demonstrate the effectiveness of the enhanced bounds and provide practical insights for inventory models with imperfect processes.

Proper choice of salvage term in optimal control of stochastic production inventory system

2025-06-18

Debopriya Dey , Samarjit Kar , A. K. Gupta +1 more | Operational Research

A sustainable (Q, R, L) inventory model for reducing defective items with transportation discounts and trade credit financing

2025-06-17

B. Malleeswaran , R. Uthayakumar | International Journal of Systems Assurance Engineering and Management

Will the inclusion of AI anchors enhance the operational performance of live streaming e-commerce supply chains?

2025-06-17

Xuehong Yan , Qihui Lu , Di Xiao | PLoS ONE

With the rapid growth of the live streaming e-commerce market, traditional live streaming models are encountering mounting challenges, whereas the advent of artificial intelligence (AI) technology has breathed new life … With the rapid growth of the live streaming e-commerce market, traditional live streaming models are encountering mounting challenges, whereas the advent of artificial intelligence (AI) technology has breathed new life into live streaming. This paper delves into the role of the AI anchor and model selection in scenarios both with and without the involvement of the Key Opinion Leader (KOL). Specifically, the AI anchor, whether invested in by the brand or the live streaming platform, is integrated into the regular anchor model (Model NN) and the hybrid model combining the KOL and the regular anchor (Model NK). A series of Stackelberg game models are formulated to compare the sales effort level, AI intelligence level, anchor influence, and the proportion of live streaming time on live streaming e-commerce. The findings suggest that the AI anchor can effectively substitute for the human anchor under certain conditions, particularly when the brand controls the AI intelligence level. To further explore the impact of the AI anchor on decision-making and profits among supply chain participants, the paper offers a thorough analysis of decisions and profits in scenarios both with and without KOL involvement. The results disclose that, under suitable conditions, the incorporation of the AI anchor can substantially enhance the operational efficiency of live streaming e-commerce supply chains, leading to increased profitability for the brand. Notably, the allocation of live streaming time between different anchors in hybrid models significantly influences the profitability of supply chain members. This discovery provides crucial insights for brands in devising live streaming strategies.

Dynamic pricing and inventory control of perishable products by a deep reinforcement learning algorithm

2025-06-17

Alireza Kavoosi , Reza Tavakkoli‐Moghaddam , Hedieh Sajedi +2 more | Expert Systems with Applications

System Point Level Crossing Approach for Lost Sales Deteriorating Inventory Systems with Positive Lead Time

2025-06-17

K. Preethi , B. Sivakumar | Methodology And Computing In Applied Probability

Continuous-review $(s,S)$ inventory system with lost sales and variable lead times

2025-06-17

Preethi Kumaresan , Sivakumar Balasubramanian , Arivarignan Gunaseelan | RAIRO - Operations Research

In this paper, we present a continuous review lost sales inventory system in which both the items stocked and the size of demands may not take integer values, indicating that … In this paper, we present a continuous review lost sales inventory system in which both the items stocked and the size of demands may not take integer values, indicating that the stock type is fluid, such as oil, flour etc. We assume that the arrival times of demands form a Poisson process and that the demand sizes have i.i.d. exponential distribution. We assume an $(s,S)$ ordering policy to replenish the inventory with random lead times. Using system point method of level crossing, we derive the stationary distribution of the on-hand inventory level in a continuous review inventory system with exponential and Erlang distributed lead times. After deriving some system performance measures, we computed the total expected cost rate. For the exponential lead time model, we provide some analytical properties of the cost function. Using numerical results, an optimal cost analysis is performed and some remarks are made as to the optimality of cost function with respect to each of decision variables

A Comparative Analysis of Inventory Models: Evaluating the Economic Order Quantity (EOQ) Model with Constant Demand versus Variable Demand Rates

2025-06-15

Animesh Sharma | Journal of Ravishankar University (Part-B)

Inventory control management remains a cornerstone of operational efficiency in modern supply chain systems. This study explores the Economic Order Quantity (EOQ) model, a foundational inventory control technique, by comparing … Inventory control management remains a cornerstone of operational efficiency in modern supply chain systems. This study explores the Economic Order Quantity (EOQ) model, a foundational inventory control technique, by comparing its application under two distinct demand scenarios: constant and variable demand rates. This research highlights how demand variability influences optimal order quantities, total inventory costs, and decision-making processes through a detailed theoretical framework, mathematical analysis, and practical implications. From recent literature in operations research and supply chain management, the article provides insights into the adaptability of the EOQ model across diverse demand conditions, offering a comprehensive guide for practitioners and researchers alike.

Ant Colony Optimization-Based Inventory Model forDeteriorating Items with Polynomial Demand and Time-Dependent Costs

2025-06-15

Mohammed Yahya Abid , Ajay Singh Yadav , B. Viswanathan +1 more | International Journal of Basic and Applied Sciences

This paper develops and analyses an advanced inventory model for deteriorating items with polynomial demand, quadratic deterioration, and ‎time-dependent holding costs under the condition of complete backlogging. The primary objective … This paper develops and analyses an advanced inventory model for deteriorating items with polynomial demand, quadratic deterioration, and ‎time-dependent holding costs under the condition of complete backlogging. The primary objective is to minimize the average total cost by ‎optimizing decision variables such as cycle length and order quantity. Due to the nonlinear and complex nature of the model, traditional ‎analytical methods may be insufficient or computationally intensive. To address this challenge, the study integrates Ant Colony Optimization ‎‎(ACO), a powerful metaheuristic inspired by the foraging behaviour of ants, to efficiently search for optimal inventory policies. Numerical ‎examples, graphical illustrations, and sensitivity analyses are provided to demonstrate the effectiveness of the proposed approach. The ‎results show that the ACO-based method achieves a significant reduction in total cost compared to conventional optimization techniques. This ‎research not only enhances the practical applicability of inventory models for deteriorating items but also demonstrates the potential of ACO ‎for solving complex, real-world supply chain and inventory management problems.

Analysis of a Stochastic Inventory model with Probabilistic Constraint

2025-06-14

Soumen Banerjee | International Journal For Multidisciplinary Research

A fixed reorder quantity system with back-order is modeled here. A Multi Objective Stochastic Inventory model[MOSIM] and a Fuzzy Multi Objective Stochastic Inventory model[FMOSIM] with Stochastic constraint are analyzed here … A fixed reorder quantity system with back-order is modeled here. A Multi Objective Stochastic Inventory model[MOSIM] and a Fuzzy Multi Objective Stochastic Inventory model[FMOSIM] with Stochastic constraint are analyzed here and are illustrated numerically considering the uniform demand.

Designing an ecotourism supply chain considering outsourcing, advertising and discount options

2025-06-13

Mehdi Hosseini , Mohammad Mahdi Paydar , Erfan Babaee Tırkolaee | Journal of Travel & Tourism Marketing

Manufacturing Performance and Organizational Practices: Evidence from an Emerging Economy

2025-06-13

Mohammad Alamgir Hossain , Walter Wehrmeyer , Mona Chitnis | International Journal of Applied Economics Finance and Accounting

Assessing productive efficiency is vital for enhancing the manufacturing sector’s contribution to the economic growth of emerging countries like Bangladesh. However, there has been no research evaluating the productive efficiency … Assessing productive efficiency is vital for enhancing the manufacturing sector’s contribution to the economic growth of emerging countries like Bangladesh. However, there has been no research evaluating the productive efficiency of the manufacturing sector in Bangladesh concerning organizational factors. This study examines Bangladesh’s manufacturing sector, concentrating on technical performance. It uncovers reasons for the sector's limited contribution to the nation's industrial foundation. Nonparametric frontier models were employed to estimate technical efficiency, revealing compelling insights via diverse econometric techniques. According to the results, the manufacturing performance in 2019 exhibited a heightened disparity across subsectors compared to 2012, with some subsectors improving their efficiency while others experiencing a decline. Organizational practices were identified as having a modest impact on manufacturing performance. Subsectors characterized by higher levels of labor intensity demonstrated significantly superior economic performance compared to other subsectors. Some previously efficient subsectors, such as luggage, printing, and cement production, lost efficiency, while cocoa, textiles, jute-related industries, chocolate, sugar confectionery, and polythene manufacturing showed improvement in recent years. In brief, Bangladesh’s manufacturing sector’s performance declined from 2012 to 2019, with widening industry disparities. Subsectors that generated export revenue displayed unsatisfactory performance, highlighting the need for organizational improvement.

Pricing and Coordination Decisions in Fresh Agricultural Product Supply Chain with Government Subsidy

2025-06-13

C Zhang , Hongjie Lan , Zhengwei Lyu | Journal of Systems Science and Systems Engineering

An Optimized Single Warehouse Inventory Model for Decaying ‎Goods with Time and Price Dependent Demand and Time Dependent Holding Cost Using the ABC Algorithm

2025-06-13

Mohammed Yahya Abid , Ajay Singh Yadav , B. Viswanathan +1 more | International Journal of Basic and Applied Sciences

This paper presents a single-warehouse inventory model for items subject to deterioration, where shortages are fully backlogged. The model ‎considers a demand rate that is dependent on both time and … This paper presents a single-warehouse inventory model for items subject to deterioration, where shortages are fully backlogged. The model ‎considers a demand rate that is dependent on both time and selling price, while the holding cost is assumed to be a linear function of time. ‎To enhance the practical applicability of the model, deterioration and shortage costs are also included in the total cost function. The main ‎objective is to minimize the total inventory cost by determining the optimal cycle length and selling price. The Artificial Bee Colony (ABC) ‎algorithm, a nature-inspired metaheuristic, is applied to efficiently solve the nonlinear optimization problem associated with the model. A ‎numerical example illustrates the effectiveness of the proposed approach, and a sensitivity analysis is conducted to examine the impact of ‎key parameters on the total cost. The results demonstrate that the ABC algorithm performs robustly under varying conditions and provides a ‎reliable tool for optimizing inventory decisions involving deteriorating items‎.

Adaptation of different inventory policies to each phase of the product life cycle

2025-06-13

Mehdi Ansari , Saeed Yaghoubi | Journal of Management Analytics

Options of financing strategies: On the advantages of profit performance and signaling efficiency

2025-06-13

Xiaoliang Zhu , Zixue Guo , Yingchen Yan +1 more | Transportation Research Part E Logistics and Transportation Review

Agency or reseller: The role of supply chain finance in deciding E-commerce channel under product return risk

2025-06-12

Kirit Ghosh , Sumanta Basu , Balram Avittathur +1 more | Transportation Research Part E Logistics and Transportation Review

Quality Investment With Information Acquisition Transparency

2025-06-12

Huan Cao , Yang Song , Xu Guan | Managerial and Decision Economics

ABSTRACT This paper investigates the interplay between a firm's product quality investment and subsequent product quality information acquisition. We consider two quality information acquisition scenarios: non‐transparent acquisition scenario and transparent … ABSTRACT This paper investigates the interplay between a firm's product quality investment and subsequent product quality information acquisition. We consider two quality information acquisition scenarios: non‐transparent acquisition scenario and transparent acquisition scenario, depending on whether the quality information acquired by the firm is observable to the public. We show that under the non‐transparent acquisition scenario, the firm's equilibrium quality investment decision and quality information acquisition decision are strategic complements, and these decisions can significantly affect consumers' inferences on product's quality level. More importantly, we uncover that in comparison with the scenario where firm's quality information acquisition is transparent to the consumers, when the quality information acquisition is non‐transparent to the consumers, the firm chooses a higher quality investment level and has more incentive to conduct the acquisition of precise quality information by incurring an extra cost after the quality investment decision‐making, which eventually leads to an increase in consumer surplus but may result in a decrease in social welfare.

Measuring Created Value for Suppliers and Buyers: A Decision Matrix Approach—Evidence from Slovak Enterprises

2025-06-12

Dana Kušnírová , Oliver Bubelíny , Mária Ďurišová | Administrative Sciences

This study introduces a structured approach for assessing value creation in supplier–buyer relationships by evaluating key value-creation indicators. Recognising strategic collaboration in B2B, the research focuses on identifying key indicators … This study introduces a structured approach for assessing value creation in supplier–buyer relationships by evaluating key value-creation indicators. Recognising strategic collaboration in B2B, the research focuses on identifying key indicators and determining their relevance based on Slovak manufacturing enterprises. Empirical data were collected via questionnaires distributed to manufacturing firms across Slovakia. Based on these data, a decision matrix was developed to quantify the value provided to suppliers and buyers. Results reveal that suppliers prioritise financial reliability and adherence to business terms, while buyers place higher value on service-related attributes such as maintenance and product quality updates. The proposed matrix serves as a practical tool for enterprises seeking to evaluate and enhance their stakeholder relationships. By offering quantifiable insights, the study supports more effective decision-making in supply chain and relationship management.

The impact of free cash flow on the speed of inventory adjustment

2025-06-09

Ala’a Adden Abuhommous | International Journal of Production Research

Intelligent optimization and inventory control of deteriorating items: an overview

2025-06-08

Praveendra Singh , Madhu Jain | Knowledge and Information Systems