C-Supply Chain - Theory and Applications-Vedran Kordic-3902613226-I-Tech Education-2008-578p-g5.pdf - Supply Chain Theory and Applications SOFTbank

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Unformatted text preview: Supply Chain Theory and Applications SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. Supply Chain Theory and Applications Edited by Vedran Kordic I-TECH Education and Publishing SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. Published by the I-Tech Education and Publishing, Vienna, Austria Abstracting and non-profit use of the material is permitted with credit to the source. Statements and opinions expressed in the chapters are these of the individual contributors and not necessarily those of the editors or publisher. No responsibility is accepted for the accuracy of information contained in the published articles. Publisher assumes no responsibility liability for any damage or injury to persons or property arising out of the use of any materials, instructions, methods or ideas contained inside. After this work has been published by the Advanced Robotic Systems International, authors have the right to republish it, in whole or part, in any publication of which they are an author or editor, and the make other personal use of the work. © 2008 I-Tech Education and Publishing Additional copies can be obtained from: [email protected] First published February 2008 Printed in Croatia A catalog record for this book is available from the Austrian Library. Supply Chains, Theory and Applications, Edited by Vedran Kordic p. cm. ISBN 978-3-902613-22-6 1. Supply Chain. 2. Theory. 3. Applications. SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. Preface Traditionally supply chain management has meant factories, assembly lines, warehouses, transportation vehicles, and time sheets. Modern supply chain management is a highly complex, multidimensional problem set with virtually endless number of variables for optimization. An Internet enabled supply chain may have just-in-time delivery, precise inventory visibility, and up-to-the-minute distribution-tracking capabilities. Technology advances have enabled supply chains to become strategic weapons that can help avoid disasters, lower costs, and make money. From internal enterprise processes to external business transactions with suppliers, transporters, channels and end-users marks the wide range of challenges researchers have to handle. The aim of this book is at revealing and illustrating this diversity in terms of scientific and theoretical fundamentals, prevailing concepts as well as current practical applications. SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. Contents Preface ........................................................................................................................................V 1. Supply Chain Collaboration .............................................................................................001 Ana Meca and Judith Timmer 2. Towards a Quantitative Performance Measurement Model in a Buyer-Supplier Relationship Context....................................019 Lamia Berrah and Vincent Cliville 3. A Framework for Assessing and Managing Large Purchaser Minority Supplier Relationships in Supplier Diversity Initiatives ..................................041 Nicholas Theodorakopoulos and Monder Ram 4. An Evaluation Framework for Supply Chains based on Corporate Culture Compatibility.............................................059 Khalid Al-Mutawah and Vincent Lee 5. How Negotiation Influences the Effective Adoption of the Revenue Sharing Contract: A Multi-Agent Systems Approach .....................................073 Ilaria Giannoccaro and Pierpaolo Pontrandolfo 6. Mean-Variance Analysis of Supply Chain Contracts ...................................................085 Tsan-Ming Choi 7. Developing Supply Chain Management System Evaluation Attributes Based on the Supply Chain Strategy ...........................095 Chun-Chin Wie and Liang-Tu Chen 8. Impact of Hybrid Business Models in the Supply Chain Performance.....................113 C. Martinez-Olvera 9. Configuring Multi-Stage Global Supply Chains With Uncertain Demand ................135 Guoqing Zhang and Behnaz Saboonchi SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. VIII 10. Fuzzy Parameters and their Arithmetic Operations in Supply Chain Systems .............................................................153 Alex Rajan 11. Fuzzy Multiple Agent Decision Support Systems for Supply Chain Management ............................................................177 Mohammad Hossein Fazel Zarandi and Mohammad Mehdi Fazel Zarandi 12. Align Agile Drivers, Capabilities and Providers to Achieve Agility: a Fuzzy-Logic QFD Approach..........................................205 Chwei-Shyong Tsai, Chien-Wen Chen and Ching-Torng Lin 13. Optimization Of Multi-Tiered Supply Chain Networks With Equilibrium Flows ..............................................................231 Suh-Wen Chiou 14. Parameterization of MRP for Supply Planning Under Lead Time Uncertainties ............................................................247 A. Dolgui , F. Hnaien , A. Louly and H. Marian 15. Design, Management and Control of Logistic Distribution Systems......................263 Riccardo Manzini and Rita Gamberini 16. Concurrent Design of Product Modules Structure and Global Supply Chain Configuration ..........................................291 H. A. ElMaraghy and N. Mahmoudi 17. Quantitative Models for Centralised Supply Chain Coordination ...........................307 Mohamad Y. Jaber and Saeed Zolfaghari 18. Moving Segmentation Up the Supply-Chain: Supply Chain Segmentation and Artificial Neural Networks..........................................339 Sunil Erevelles and Nobuyuki Fukawa 19. A Dynamic Resource Allocation on Service Supply Chain ......................................351 Soo Wook Kim and Kanghwa Choi 20. Pricing in Supply Chain under Vendor Managed Inventory .....................................387 Subramanian Nachiappan and Natarajan Jawahar 21. Transshipment Problems in Supply Chain Systems: Review and Extensions..............................................................427 Chuang-Chun Chiou SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. IX 22. The Feasibility Analysis of Available-to-Promise in Supply-Chain System under Fuzzy Environment ..................449 Chen-Tung Chen 23. Assessing Improvement Opportunities and Risks of Supply Chain Transformation Projects.......................................................469 Alessandro Brun and Maria Caridi 24. Modeling of Supply Chain Contextual-Load Model for Instability Analysis ..........489 Nordin Saad, Visakan Kadirkamanathan and Stuart Bennett 25. New Measures for Supply Chain Vulnerability: Characterizing the Issue of Friction in the Modelling and Practice of Procurement.............................515 N.C. Simpson and P.G. Hancock 26. Competence Based Taxonomy of Supplier Firms in the Automotive Industry..... 537 Krisztina Demeter, Andrea Gelei and Istvan Jenei 27. Design of Multi-behavior Agents for Supply Chain Planning: An Application to the Lumber Industry...................................551 Pascal Forget, Sophie D’Amours, Jean-Marc Frayret and Jonathan Gaudreault SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. 1 Supply Chain Collaboration Ana Meca1 and Judith Timmer2 1Operations Research Center (University Miguel Hernandez), of Applied Mathematics (University of Twente), 1 Spain 2 The Netherlands 2Department 1. Introduction In the past, research in operations management focused on single-firm analysis. Its goal was to provide managers in practice with suitable tools to improve the performance of their firm by calculating optimal inventory quantities, among others. Nowadays, business decisions are dominated by the globalization of markets and increased competition among firms. Further, more and more products reach the customer through supply chains that are composed of independent firms. Following these trends, research in operations management has shifted its focus from single-firm analysis to multi-firm analysis, in particular to improving the efficiency and performance of supply chains under decentralized control. The main characteristics of such chains are that the firms in the chain are independent actors who try to optimize their individual objectives, and that the decisions taken by a firm do also affect the performance of the other parties in the supply chain. These interactions among firms’ decisions ask for alignment and coordination of actions. Therefore, game theory, the study of situations of cooperation or conflict among heterogenous actors, is very well suited to deal with these interactions. This has been recognized by researchers in the field, since there are an ever increasing number of papers that applies tools, methods and models from game theory to supply chain problems. The field of game theory may be divided roughly in two parts, namely non-cooperative game theory and cooperative game theory. Models in non-cooperative game theory assume that each player in the game (e.g. a firm in a supply chain) optimizes its own objective and does not care for the effect of its decisions on others. The focus is on finding optimal strategies for each player. Binding agreements among the players are not allowed. One of the main concerns when applying non-cooperative game theory to supply chains is whether some proposed coordination mechanism, or strategy, coordinates the supply chain, that is, maximizes the total joint profit of the firms in the supply chain. In contrast, cooperative game theory assumes that players can make binding agreements. Here the focus is on which coalition of players will form and which allocation of the joint worth will be used. One of the main questions when applying cooperative game theory to supply chains is whether cooperation is stable, that is, whether there exists an allocation of the joint profit among all the parties in the supply chain such that no group of them can do better on its own. Up to date, many researchers use non-cooperative game theory to analyse supply chain problems. SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. 2 Supply Chain: Theory and Applications This work surveys applications of cooperative game theory to supply chain management. The supply chains under consideration are so-called divergent distribution networks, which consist of a single supplier and a finite number of retailers. In particular, we focus on two important aspects of supply chain collaboration. First, we focus on inventory centralization, also called inventory pooling. Retailers may collaborate to benefit from the centralization of their inventories. Such collaboration may lead to reduced storage costs, larger ordering power, or lower risks, for example. Models from cooperative game theory may be used to find stable allocations of the joint costs. Such allocations are important to obtain and maintain the collaboration among the retailers. There is a steady stream of papers on this subject and these are reviewed here. Second, we consider retailer-supplier relationships. Besides collaboration among retailers only, a further gain in efficiency may be obtained by collaboration between the supplier and the retailers. Also here, the question is how to reduce the joint costs. Cooperative game theory may be used to find stable allocations of the joint costs. Although a natural field to research, these problems are hardly studied by means of cooperative game theory. We review the few papers in the literature and indicate possibilities for future research. We wish to point out that there are several other areas of cooperative games that lend themselves nicely to applications in supply chains, but that we do not review. One may think of bargaining models for negotiations among supply chain partners, network models to study multi-echelon supply chains, or coalition formation among supply chain partners, to name some themes. For bargaining models and coalition formation we refer to the review by Nagarajan & Sošiþ (2006), and for theoretical issues and a framework for more general supply chain networks we refer to Slikker & Van den Nouweland (2001). This work is organized as follows. In section 2 we introduce some basic concepts of cooperative game theory. This helps understand how the collaboration among several agents is modelled. With this understanding, some well known results from the literature on cooperative game theory are surveyed. Thereafter we review applications of cooperative game theory to inventory centralization (section 3). Section 4 reviews and discusses retailersupplier relationships. Finally, section 5 concludes and highlights areas for future research. 2. Cooperative game theory Game theory provides tools, methods and models to investigate supply chain collaboration, coordination and competition. The game theory literature can roughly be divided into cooperative and non-cooperative game theory. There are some differences between analyses using non-cooperative game theory and those using cooperative game theory. When applying non-cooperative game theory, it is assumed that each player acts individually according to its objective, and usually the mechanisms to get it are investigated. One of the main points of concern is whether the proposed mechanism provides a solution that maximizes the total supply chain profit under Nash equilibrium. In contrast, cooperative game theory does not investigate the individual behaviour of the players explicitly and assume that once the players form a coalition, the coordination between them is achieved one way or another (i.e., either by making binding agreements and commitments or by a suitable coordination mechanism). Although cooperative games abstract from the details of mechanism that lead to cooperation, they are very powerful to investigate the problem of allocation of worth in detail. Here, the main question is whether the cooperation is stable, i.e. there are stable allocations of the total worth or cost among the SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. Supply Chain Collaboration 3 players such that no group of them would like to leave the consortium. Cooperative game theory offers the concept of the core (Gillies, 1953) as a direct answer to that question. Nonemptiness of the core means that there exists at least one stable allocation of the total worth such that no group of players has an incentive to leave. In this chapter, we concentrate ourselves mainly on the analysis of coordination induced by cooperation (collaboration). In this approach cooperative game theory will be instrumental. Roughly speaking, a transferable utility game (henceforth TU game) is a pair consisting of a finite set of players and a characteristic function, which measures the worth (benefit or cost) of every coalition of players, i.e. subset of the finite initial set (grand coalition), through a real valued mapping. The sub-game related to a particular coalition is the restriction of the mapping to the sub-coalitions of this coalition. A worth-sharing vector will be a real vector with as many components as the number of players in the game. The core of the TU game consists of those efficient worth-sharing vectors which allocate the worth (cost) of the grand coalition in such a way that every other coalition receives at least (or pays at most) its worth, given by the characteristic function. In the following, worth-sharing vectors belonging to the core will be called core-allocations. A TU game has a non-empty core if and only if it is balanced (see Bondareva 1963 or Shapley 1967). It is a totally balanced game if the core of every subgame is non-empty. Totally balanced games were introduced by Shapley and Shubik in the study of market games (see Shapley & Shubik, 1969). A population monotonic allocation scheme (see Sprumont 1990), or pmas, for a TU game guarantees that once a coalition has decided upon an allocation of its worth, no player will ever be tempted to induce the formation of a smaller coalition by using his bargaining skills or by any others means. It is a collection of worth-sharing vectors for every sub-game satisfying efficiency property and requiring that the worth to every player increases (or decreases) as the coalition to which it belongs grows larger. Note that the set of worthsharing vectors that can be reached through a pmas can be seen as a refinement of the core. Every TU game with pmas is totally balanced. A game is said to be super-additive (or sub-additive) if it is always beneficial for two disjoint coalitions to cooperate and form a larger coalition. Balanced TU games might not be superadditive (sub-additive), but they always satisfy super-additive (sub-additive) inequalities involving the grand coalition. However, totally balanced TU games are super-additive (subadditive). A well-known class of balanced and super-additive (sub-additive) games is the class of convex (concave) games. A TU game is said to be convex if the incentives for joining a coalition increase as the coalition grows, so that one might expect a “snowballing” effect when the game is played cooperatively (Shapley, 1971). Another class of balanced and super-additive (sub-additive) games is the class of permutationally convex (concave) games (Granot & Huberman, 1982). A game is permutationally convex (concave) if and only if there exists an ordering of the players for the grand coalition such that the game is permutationally convex (concave) with respect to this ordering. Granot & Huberman (1982) showed that every permutationally concave TU game is balanced. A worth allocation rule for TU games, is a map which assigns to every TU game a worthsharing vector. One example of such a worth allocation rule is the proportional rule. This proportional division mechanism allocates the worth of the grand coalition in a proportional way according to a fixed proportionality factor (e.g., the individual worth for each player). SOFTbank E-Book Center Tehran, Phone: 66403879,66493070 For Educational Use. 4 Supply Chain: Theory and Applications 3. Inventory centralization Generally speaking, shops or retailers trade various types of goods, and to keep their service to their customers at a high level they aim at meeting the demand for all goods on time. To attain this goal, retailers may keep inventories in a private warehouse. These inventories bring costs along with them. To keep these costs low, a good management of the inventories is needed. The management of inventory, or inventory management, started at the beginning of this century when manufacturing industries and engineering grew rapidly. To the best of our knowledge, a starting paper on mathematical models of inventory management was Harris (1913). Since then, many books on this subject have been published. For example, Hadley & Whitin (1963), Hax & Candea (1984), Tersine (1994), and Zipkin (2000). Most often, the objective of inventory management is to minimize the average cost per time unit (in the long run) incurred by the inventory system, while guaranteeing a prespecified minimal level of service. In this section, we review the literature and study the applications of cooperative game theory to inventory centralization in supply chains. The supply chains that we focus on along this work are divergent distribution networks that consist of a supplier and a finite number of retailers. The main motivation behind using a cooperative game is that it allows us to establish a framework to examine the effect of coordinated or...
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