Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demand

Purpose: The purpose of this study is to compare the performance of two advanced supply chain coordination mechanisms, Vendor Managed Inventory (VMI) and Collaborative Planning Forecasting and Replenishment (CPFR), under a price-sensitive uncertain demand environment, and to make the optimal decisio...

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Detalhes bibliográficos
Autores: Kazemi, Yasaman, Zhang, Jun
Formato: artículo
Fecha de publicación:2013
País:España
Recursos:Universitat Politècnica de Catalunya (UPC)
Repositorio:UPCommons. Portal del coneixement obert de la UPC
Idioma:inglés
OAI Identifier:oai:upcommons.upc.edu:2099/13888
Acesso em linha:https://hdl.handle.net/2099/13888
Access Level:acceso abierto
Palavra-chave:Business logistics -- Prices
Price-sensitive demand, VMI, CPFR, supply chain profit
Simulation optimization
Optimal order quantity
Optimal retail price
Logística (Indústria) -- Preus
Àrees temàtiques de la UPC::Economia i organització d'empreses::Direcció d'operacions
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spelling Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demandKazemi, YasamanZhang, JunBusiness logistics -- PricesPrice-sensitive demand, VMI, CPFR, supply chain profitSimulation optimizationOptimal order quantityOptimal retail priceLogística (Indústria) -- PreusÀrees temàtiques de la UPC::Economia i organització d'empreses::Direcció d'operacionsPurpose: The purpose of this study is to compare the performance of two advanced supply chain coordination mechanisms, Vendor Managed Inventory (VMI) and Collaborative Planning Forecasting and Replenishment (CPFR), under a price-sensitive uncertain demand environment, and to make the optimal decisions on retail price and order quantity for both mechanisms. Design/ methodology/ approach: Analytical models are first applied to formulate a profit maximization problem; furthermore, by applying simulation optimization solution procedures, the optimal decisions and performance comparisons are accomplished. Findings: The results of the case study supported the widely held view that more advanced coordination mechanisms yield greater supply chain profit than less advanced ones. Information sharing does not only increase the supply chain profit, but also is required for the coordination mechanisms to achieve improved performance. Research limitations/implications: This study considers a single vendor and a single retailer in order to simplify the supply chain structure for modeling. Practical implications: Knowledge obtained from this study about the conditions appropriate for each specific coordination mechanism and the exact functions of coordination programs is critical to managerial decisions for industry practitioners who may apply the coordination mechanisms considered. Originality/value: This study includes the production cost in Economic Order Quantity (EOQ) equations and combines it with price-sensitive demand under stochastic settings while comparing VMI and CPFR supply chain mechanisms and maximizing the total profit. Although many studies have worked on information sharing within the supply chain, determining the performance measures when the demand is price-sensitive and stochastic was not reported by researchers in the past literature.Peer ReviewedSchool of Industrial and Aeronautic Engineering of Terrassa (ETSEIAT). Universitat Politècnica de Catalunya (UPC)20132013-07-0120132013-10-14journal articlehttp://purl.org/coar/resource_type/c_6501NAhttp://purl.org/coar/version/c_be7fb7dd8ff6fe43info:eu-repo/semantics/articleapplication/pdfhttps://hdl.handle.net/2099/13888reponame:UPCommons. Portal del coneixement obert de la UPCinstname:Universitat Politècnica de Catalunya (UPC)Inglésengopen accesshttp://purl.org/coar/access_right/c_abf2Attribution-NonCommercial 3.0 Spainhttp://creativecommons.org/licenses/by-nc/3.0/es/info:eu-repo/semantics/openAccessoai:upcommons.upc.edu:2099/138882026-05-27T15:37:01Z
dc.title.none.fl_str_mv Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demand
title Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demand
spellingShingle Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demand
Kazemi, Yasaman
Business logistics -- Prices
Price-sensitive demand, VMI, CPFR, supply chain profit
Simulation optimization
Optimal order quantity
Optimal retail price
Logística (Indústria) -- Preus
Àrees temàtiques de la UPC::Economia i organització d'empreses::Direcció d'operacions
title_short Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demand
title_full Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demand
title_fullStr Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demand
title_full_unstemmed Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demand
title_sort Optimal decisions and comparison of VMI and CPFR under price-sensitive uncertain demand
dc.creator.none.fl_str_mv Kazemi, Yasaman
Zhang, Jun
author Kazemi, Yasaman
author_facet Kazemi, Yasaman
Zhang, Jun
author_role author
author2 Zhang, Jun
author2_role author
dc.subject.none.fl_str_mv Business logistics -- Prices
Price-sensitive demand, VMI, CPFR, supply chain profit
Simulation optimization
Optimal order quantity
Optimal retail price
Logística (Indústria) -- Preus
Àrees temàtiques de la UPC::Economia i organització d'empreses::Direcció d'operacions
topic Business logistics -- Prices
Price-sensitive demand, VMI, CPFR, supply chain profit
Simulation optimization
Optimal order quantity
Optimal retail price
Logística (Indústria) -- Preus
Àrees temàtiques de la UPC::Economia i organització d'empreses::Direcció d'operacions
description Purpose: The purpose of this study is to compare the performance of two advanced supply chain coordination mechanisms, Vendor Managed Inventory (VMI) and Collaborative Planning Forecasting and Replenishment (CPFR), under a price-sensitive uncertain demand environment, and to make the optimal decisions on retail price and order quantity for both mechanisms. Design/ methodology/ approach: Analytical models are first applied to formulate a profit maximization problem; furthermore, by applying simulation optimization solution procedures, the optimal decisions and performance comparisons are accomplished. Findings: The results of the case study supported the widely held view that more advanced coordination mechanisms yield greater supply chain profit than less advanced ones. Information sharing does not only increase the supply chain profit, but also is required for the coordination mechanisms to achieve improved performance. Research limitations/implications: This study considers a single vendor and a single retailer in order to simplify the supply chain structure for modeling. Practical implications: Knowledge obtained from this study about the conditions appropriate for each specific coordination mechanism and the exact functions of coordination programs is critical to managerial decisions for industry practitioners who may apply the coordination mechanisms considered. Originality/value: This study includes the production cost in Economic Order Quantity (EOQ) equations and combines it with price-sensitive demand under stochastic settings while comparing VMI and CPFR supply chain mechanisms and maximizing the total profit. Although many studies have worked on information sharing within the supply chain, determining the performance measures when the demand is price-sensitive and stochastic was not reported by researchers in the past literature.
publishDate 2013
dc.date.none.fl_str_mv 2013
2013-07-01
2013
2013-10-14
dc.type.none.fl_str_mv journal article
http://purl.org/coar/resource_type/c_6501
NA
http://purl.org/coar/version/c_be7fb7dd8ff6fe43
dc.type.openaire.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://hdl.handle.net/2099/13888
url https://hdl.handle.net/2099/13888
dc.language.none.fl_str_mv Inglés
eng
language_invalid_str_mv Inglés
language eng
dc.rights.none.fl_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial 3.0 Spain
http://creativecommons.org/licenses/by-nc/3.0/es/
dc.rights.openaire.fl_str_mv info:eu-repo/semantics/openAccess
rights_invalid_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial 3.0 Spain
http://creativecommons.org/licenses/by-nc/3.0/es/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv School of Industrial and Aeronautic Engineering of Terrassa (ETSEIAT). Universitat Politècnica de Catalunya (UPC)
publisher.none.fl_str_mv School of Industrial and Aeronautic Engineering of Terrassa (ETSEIAT). Universitat Politècnica de Catalunya (UPC)
dc.source.none.fl_str_mv reponame:UPCommons. Portal del coneixement obert de la UPC
instname:Universitat Politècnica de Catalunya (UPC)
instname_str Universitat Politècnica de Catalunya (UPC)
reponame_str UPCommons. Portal del coneixement obert de la UPC
collection UPCommons. Portal del coneixement obert de la UPC
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15.300719

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