A price-sensitive quantity-flexible supply chain contract model

Fiyata duyarlı ve miktar esnekliği olan bir tedarik zincir sözleşmesi modeli

Abstract

A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The objective of every supply chain is to maximize the overall value generated. The value a supply chain generates is the difference between what the final product is worth to the customer and the effort the supply chain expends in filling the customer’s request. For most commercial supply chains, this value will be strongly correlated with the supply chain profitability, the difference between the revenue generated from the customer and the overall cost across the entire supply chain. The objective of maximizing this supply chain surplus can be achieved by improving the supply chain performance in terms of efficiency and responsiveness using the four supply chain drivers: inventory, transportation, facilities, and information. In this dissertation, we discussed these drivers and introduced supply chain contracts as a new driver to maximize supply chain profitability. Effective use of the contracts can substantially increase the overall supply chain profitability and its competitive advantage by forcing the companies into an intercompany interfunctional scope of strategic fit to evaluate every action in the context of the entire supply chain. This broad scope increases the size of the surplus to be shared among all stages of the supply chain. A contract specifies the parameters within which a buyer places orders and a supplier fulfills them. It may contain specifications regarding quantity, price, time, and quality. As contracts change, the risk different stages of the supply chain bear changes, which affects the buyer’s and supplier’s decisions and supply chain profitability. By entering into such a contract, the buyer often stands to gain guaranteed delivery of the product, which is very useful in times of scarcity, shorter delivery times, lower purchasing price, and a lower safety stock level. The supplier will also benefit with a better production plan, reduced variance of demand, economies of scale, and less paperwork. Harder to measure, but also important, is the increased level of trust and cooperation which can develop between a buyer and a supplier who decide to engage in such a contract.Of particular interest here are contracts that specify the parameters within which a buyer places orders and a supplier fulfills them in order to maximize the total supply chain surplus.We presented two supply chain contract models. First, where a retailer facing price sensitive demand may obtain a discount by committing a fixed quantity over a finite horizon, and second where a manufacturer offering buyback or quantity flexibility contracts may increase the total supply chain profit. We concluded that the first model incorporates demand as a function of the selling price but does not address the crucial issue of total supply chain surplus maximization. On the other hand, the second model, although it increases the total supply chain surplus, does not incorporate the demand elasticity.We then developed a model to address the individual weaknesses of the models discussed by incorporating the price sensitive demand into quantity flexibility contracts by determining the optimal level of product availability, as a function of the selling price, which maximizes the total supply chain profit. We also proposed two solutions to the issue of profit sharing related to the distribution of the additional supply chain profit generated by using the contracts. Furthermore, through numerical experiments, we showed that our model maximizes total supply chain surplus by incorporating demand elasticity and profit sharing into quantity flexibility contracts. We also developed a computer program to help simulate the system to find optimum contract parameters. We then summarized the strength and weaknesses of the models discussed with respect to our model and showed that our model, Maximize Supply Chain Profit with Buyback and Quantity Flexibility Contracts and Profit Sharing with Demand as a Function of the Selling Price Model, combines the strength of the models discussed and addresses their main weaknesses. It is our belief that the supply chain contract model developed in this dissertation can be an integral part of any Advanced Planning and Scheduling (APS) system.

Özet

Tedarik zinciri bir ürünün tasarım aşamasından tüketicinin eline ulaşıncaya kadar geçireceği ve gerekli olan tüm aşamaları kapsar. Bu çalışmamızda tedarik zinciri sözleşmelerinin bir performans geliştiricisi olarak tedarik zinciri katma değerini en üst düzeye çıkartmada nasıl kullanılabileceği araştırılmış ve iki sözleşme modeli incelenmiştir. İlk sözleşme modeli olarak, ürüne olan talebin satış fiyatı ile bağlantılı olduğu bir ortamda, üreticinin satıcıya belli bir miktarda ürün alma garantisi karşılığı önerdiği indirimler ele alınmıştır. İkinci sözleşme modeli olarak ise, üreticinin toplam tedarik zinciri katma değerini arttırmak için satıcıya önerdiği satılamayan ürünü geri alma ve satın almada miktar esnekliği sağlama sözleşmeleri incelenmiştir. Birinci modelde, görüleceği üzere, her ne kadar talep, satış fiyatı ile bağlantılı ise de, sonuç yalnız satıcı açısından değerlendirildiğinden, modelin tedarik zinciri toplam katma değeri üzerindeki etkisi belirsizdir. Diğer yandan, ikinci model tedarik zincirinin toplam katma değerini arttırdığı halde, talebin fiyat duyarlılığı göz önüne alınmamıştır. Çalışmamızda geliştirdiğimiz modelin özgün yanı, yukarıdaki iki modelin zayıf noktalarına cevap vermesi ve talebin fiyata duyarlı olduğu bir ortamda üretici satıcı arasında miktar esnekliği sağlayan bir sözleşmenin tedarik zinciri katma değerini en üst düzeye çıkarmasıdır. Çalışmamızda ayrıca sözleşmeden kaynaklanan bu ek katma değer artışının her iki tarafın da kazanması için nasıl paylaştırılabileceğini öneren iki yöntem geliştirilmiştir.