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Production lead-time hedging and order allocation in an MTO supply chain
European Journal of Operational Research ( IF 6.0 ) Pub Date : 2023-05-31 , DOI: 10.1016/j.ejor.2023.05.031
Yue Zhai , Guowei Hua , Meng Cheng , T.C.E. Cheng

In an make-to-order (MTO) supply chain, as consumers are increasingly sensitive to the delivery time and delivery reliability, quoting a short delivery time while delivering on-time is the major challenge for the retailer. To avoid tardy delivery, the retailer usually requires the manufacturer provide reliable delivery service by hedging against its production uncertainty, which is termed as production lead-time hedging (PLTH). To examine the effect of PLTH strategy on delivery time decision and profits for both retailer and manufacturer, we develop two game models. To our best knowledge, this paper is among the first that study delivery time quotation while considering delivery reliability and production uncertainty control. Furthermore, as multi-sourcing becomes more and more popular, we extend the basic single sourcing model to the multi-sourcing model. The main methodological contribution is the development of a traceable game theoretical model that links operational hedging decisions and order allocation implication, whilst considering delivery unreliability. Our findings show that adopting the PLTH strategy, which enables the retailer to quote a short delivery time in most cases, is the dominant strategy for the retailer. Especially, the multi-sourcing outperforms the single sourcing. The single sourcing Nash game also benefits the manufacturer. However, in the single sourcing Stackelberg game, the manufacturer will join the PLTH strategy only when the consumer's delivery time sensitivity is not sufficiently large. Interesting, when the consumer's delivery time sensitivity becomes sufficiently large or the consumer's on-time delivery sensitivity becomes sufficiently small, the retailer will scarify the on-time delivery reliability.



中文翻译:

MTO 供应链中的生产提前期对冲和订单分配

在按订单生产(MTO)供应链中,随着消费者对交货时间和交货可靠性越来越敏感,在按时交货的同时缩短交货时间是零售商面临的主要挑战。为了避免延迟交货,零售商通常要求制造商提供可靠的交货服务,以对冲其生产不确定性,这被称为生产提前期对冲(PLTH)。为了检验 PLTH 策略对零售商和制造商的交货时间决策和利润的影响,我们开发了两个博弈模型。据我们所知,本文是最早在考虑交货可靠性和生产不确定性控制的情况下研究交货时间报价的论文之一。此外,随着多源采购变得越来越流行,我们将基本的单一采购模型扩展到多采购模型。主要方法论贡献是开发了可追踪的博弈理论模型,该模型将操作对冲决策和订单分配含义联系起来,同时考虑了交付的不可靠性。我们的研究结果表明,采用 PLTH 策略是零售商的主导策略,该策略使零售商在大多数情况下能够报价较短的交货时间。特别是,多源优于单一源。单一采购纳什游戏也使制造商受益。然而,在单一采购Stackelberg博弈中,只有当消费者的交货时间敏感性不够大时,制造商才会加入PLTH策略。有趣的,

更新日期:2023-05-31
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