{"title":"A surcharge pricing scheme for coordinating the supply chain of deteriorating products under the JIT environment","authors":"J. Razmi, Amin Aslani, S. H. Amin","doi":"10.1504/IJBPSCM.2018.098307","DOIUrl":null,"url":null,"abstract":"We investigate the coordination of a supply chain of deteriorating products under the JIT environment. Deteriorating products lose their quality over time, and their inventory and production models have specific characteristics, different from the classical models. JIT includes several shipments in small sizes from a supplier to a buyer. For the buyer, JIT results in a decrease in inventory holding costs. However, for the supplier, it causes an increase in the number of setups, which increases the total cost. Consequently, the supplier is reluctant to participate in the JIT system, unless his/her loss is compensated. We propose a surcharge pricing in which the buyer offers the supplier an additional increase in wholesale price, and in return, asks him/her to switch to the JIT system. Numerical analyses indicate that this scheme is capable of fully coordinating the SC. The proposed scheme also has positive environmental impacts which are investigated.","PeriodicalId":37630,"journal":{"name":"International Journal of Business Performance and Supply Chain Modelling","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2018-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Business Performance and Supply Chain Modelling","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1504/IJBPSCM.2018.098307","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"Business, Management and Accounting","Score":null,"Total":0}
引用次数: 0
Abstract
We investigate the coordination of a supply chain of deteriorating products under the JIT environment. Deteriorating products lose their quality over time, and their inventory and production models have specific characteristics, different from the classical models. JIT includes several shipments in small sizes from a supplier to a buyer. For the buyer, JIT results in a decrease in inventory holding costs. However, for the supplier, it causes an increase in the number of setups, which increases the total cost. Consequently, the supplier is reluctant to participate in the JIT system, unless his/her loss is compensated. We propose a surcharge pricing in which the buyer offers the supplier an additional increase in wholesale price, and in return, asks him/her to switch to the JIT system. Numerical analyses indicate that this scheme is capable of fully coordinating the SC. The proposed scheme also has positive environmental impacts which are investigated.
期刊介绍:
IJBPSCM covers original, high-quality and cutting-edge research on all aspects of supply chain modelling, aiming at bridging the gap between theory and practice with applications analysing the real situation to improve business performance. Topics covered include Business performance modelling, strategy Vendor/supplier selection, supplier development, purchasing management Supply chain management (SCM), green supply chain modelling Reverse logistics, closed loop/knowledge-based supply chains, 3PL/4PL Sustainable/quality based/agile/leagile/intelligent SCM Supply chain performance/optimisation/risk/decision making/support systems AI, information sharing in SCM, systems approach to SCM Coordinated/global/flexible SCM, risk mitigation strategies Stochastic supply chain games IT-enabled SCM, fuzzy modelling, data mining Supply chain network management, modelling/simulation, implementation Training/education, information security, RFID Supply chain analysis, transportation decisions, vehicle routing, bullwhip effect Logistics in disaster management Cross-country comparison.