A co-ordination model combining incentive scheme and co-ordination policy for a single-vendormulti-buyer supply chain

Chi Kin Chan, Y. C.E. Lee

Research output: Journal article publicationJournal articleAcademic researchpeer-review

22 Citations (Scopus)

Abstract

Incentive scheme and co-ordination policy are substantial components for the co-ordination of a decentralized supply chain system, but there is little work combining the two components as a single decision model (Li and Wang, 2007). This paper proposes a model which incorporates both incentive and co-ordination issues into a single co-ordination model for a single-vendor multi-buyer supply chain. In the proposed model, the co-ordination is achieved by synchronizing ordering and production cycles while price discount, which is based on the buyers' order intervals, is used as the incentive to motivate buyers to participate in the co-ordination. While the vendor is benefited from the co-ordination by synchronized cycles, the proposed price discount scheme can guarantee that a buyer's total relevant cost of co-ordination will be reduced when compared with independent optimization. More importantly, the proposed price discount scheme does not require any cost information from the buyers.
Original languageEnglish
Pages (from-to)136-143
Number of pages8
JournalInternational Journal of Production Economics
Volume135
Issue number1
DOIs
Publication statusPublished - 1 Jan 2012

Keywords

  • Multiple buyers
  • Price discount
  • Supply chain
  • Synchronization

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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