Coordinating a supply chain for deteriorating items under VMI with supply contracts | |
| Author | Anyarin Sakrujiratham |
| Call Number | AIT Diss. no. ISE-23-03 |
| Subject(s) | Inventory control Business logistics--Inventory control Business logistics--Mathematical models |
| Note | A Dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Engineering in Industrial and Manufacturing Engineering |
| Publisher | Asian Institute of Technology |
| Abstract | This research considered a two-echelon supply chain with a single vendor and a single retailer for a deteriorating item under the vendor-managed inventory (VMI) policy. The study considers the time to deterioration following a Weibull distribution with increasing deterioration rate, price-sensitive demand, and completely backlogged shortage. We first developed a mathematical model for a VMI supply chain of deteriorating items to help determine the optimal solutions for the length of a replenishment cycle and the replenishment quantity to minimize the total supply chain cost. Then, we tackled the supply chain coordination problem which cannot be ensured by using VMI alone through incorporating a revenue-sharing contract between the supply chain’s members. The centralized and the decentralized VMI systems with/without the supply contract were compared to see if the revenue-sharing contract can help coordinate the supply chain or not. The applicability of the proposed contract model was illustrated through numerical experiments and sensitivity analyses. The results showed that the revenue-sharing contract could perfectly coordinate the decentralized VMI supply chain for deteriorating items. It significantly helps increase the total supply chain profit, and the coordination efficiency could reach 100%, i.e., equivalent to the total profit of the centralized system. The revenue-sharing contract could also help flexibly allocate the total supply chain profit to all members. The results of this research can help supply chain managers to manage the supply of deteriorating products, encouraging the vendors to participate in VMI policy, maximizing the system wide profit while achieving supply chain coordination. |
| Year | 2023 |
| Type | Dissertation |
| School | School of Engineering and Technology |
| Department | Department of Industrial Systems Engineering (DISE) |
| Academic Program/FoS | Industrial and Manufacturing Engineering (IME) |
| Chairperson(s) | Huynh, Trung Luong; |
| Examination Committee(s) | Manukid Parnichkun;Loc, Thai Nguyen; |
| Scholarship Donor(s) | AIT Fellowship; |
| Degree | Thesis (Ph. D.) - Asian Institute of Technology, 2023 |