Business Operating Strategy for Newsvendor Problems Considering Market Demand and Product Quality Risks
| Autor: | Sheng-Fen Lin, 林聖芬 |
|---|---|
| Rok vydání: | 2011 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 99 This thesis presents a new supply chain model which considers both market demand and product quality risks, and recommends win-win business collaboration approach based on vendor managed inventory (VMI) with consignment arrangement. The newsvendor problem is one of the classic problems in the literature on inventory management. This problem is a three-node supply chain consisting of a supplier, a buyer, and customers. Previous studies were focused on customer demand, supplier costs, and the buyer risk profile. This research presents two models. Model 1 is a traditional model, where the buyer determines market price and order quantity, but he will in turn bear market risks such as inventory cost and shortage cost. The supplier earns profit from the ordered quantity, but will also bear the cost of providing defective products to customers. In Model 2, the buyer will solely play the role of selling the products and earn a profit from the quantity of units sold and a pre-specified percentage of the selling price; in contrast, the supplier will decide the market price and production quantity, and bear market demand and product quality risks. It is assumed that the supplier will employ a Bayesian rectifying inspection plan for both models to minimize the product failure cost. In the study, it is shown that Model 2 is always superior to Model 1 in terms of the total profit earned by the supply chain when only market risks are considered. In addition, the win-win conditions for both supplier and buyer are derived from the comparisons between profits earned in Models 1 and 2, provided that both risks are considered. An example problem is presented to illustrate the two models, along with sensitivity analyses of three model parameters: product failure cost, standard deviation of market demand, and salvage value per unit of unsold product. Based on the numerical results, we conclude the following: (1) production quantity of Model 1 is never less than that of Model 2, and thereby the optimal sample size of Model 1 is never less than that of Model 2; (2) models with inspection errors will result in larger sample sizes and higher product quality cost; (3) total profit difference between Models 1 and 2 tends to be small when uncertainty (standard deviation) of market demand decreases; (4) order quantity of Model 1 or production quantity of Model 2 will increase as salvage value increases; (5) buyer loss in Model 1 or supplier loss in Model 2 will decrease when salvage value increases. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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