THE BUYER'S PROCURING MECHANISM UNDER OPERATING COSTSHARING IN SUPPLY CHAIN

Xuewu WANG

Journal of Systems Science & Complexity ›› 2010, Vol. 23 ›› Issue (6) : 1102-1117.

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中国科学院数学与系统科学研究院期刊网
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Journal of Systems Science & Complexity ›› 2010, Vol. 23 ›› Issue (6) : 1102-1117. DOI: 10.1007/s11424-010-7167-0
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THE BUYER'S PROCURING MECHANISM UNDER OPERATING COSTSHARING IN SUPPLY CHAIN

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Abstract

This paper considers a buyer's procuring strategy where the
buyer purchases products from a supplier in order to minimize his
total cost. Assume that the customer arrivals follow a Poisson
process, a base-stock policy is implemented by the buyer, and the
supplier will afford partial operating cost incurred by the buyer;
The cost shared by the buyer includes procuring cost and some
operating cost; The supplier does not hold the inventory and her
production time is exponentially distributed. The objective of the
supplier is to maximize her profit. The buyer designs a contract
to minimize his total expected cost. Two different cases are
considered: One potential supplier and many competing suppliers.
The optimal control approaches are used to design the buyer's
optimal mechanism and some simple procurement mechanisms are
presented.

Key words

Asymmetric information / contract / supply chain management.

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Xuewu WANG. THE BUYER'S PROCURING MECHANISM UNDER OPERATING COSTSHARING IN SUPPLY CHAIN. Journal of Systems Science and Complexity, 2010, 23(6): 1102-1117 https://doi.org/10.1007/s11424-010-7167-0
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