Supply Chain Coordination Mechanism Based on Lead-Time Compression under Elastic Demand

Abstract:

The optimization for profit coordination of the supply chain under elastic demand, which involves a two-level supply chain consisted of a supplier and a buyer, is discussed. Supplier supplies in JIT mode and supply chain members reduce lead-time through lead-time crashing to reduce costs. Based on game theory and the aim of minimizing the total cost of each party respectively, a two-level stackelberg leader-follower game model, in which buyer is the leader and supplier is the follower, is established. Buyer takes all the crashing cost and gives incentives to supplier to promote cooperation. A comparison is given among the profits of buyer, supplier and system after and not after lead-time crashing respectively, and the increased benefit among the three parties after lead-time crashing is analyzed, too. Finally, a numerical example and a simulation analysis are given to show the effect of the variations of the parameters on the increased benefit of buyer, supplier and system.

• Periodical: Advanced Materials Research (Volumes 472-475)
• Pages: 3312-3315
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.472-475.3312
• Online since: February 2012
• Authors: Qin Lv
• Keywords: Game Theory, Lead-Time Compression, Optimization, Stackelberg Game

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