Abstract
We study coordination of assembly systems with random supplier yields and random customer demand. We propose four contracts which are combinations of well-known contracts in the literature and show that the contracts can coordinate the chain under forced compliance. Our contracts have less payment schemes than the existing contracts given for coordination of assembly systems in the literature. We show that arbitrary profit allocation between the levels of the supply chain (the manufacturer or the suppliers) is possible. We also provide sufficient conditions which enable arbitrary profit allocation among the suppliers and illustrate the profit allocation with numerical examples.
Original language | English |
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Pages (from-to) | 886-896 |
Number of pages | 11 |
Journal | International Journal of Production Research |
Volume | 53 |
Issue number | 3 |
DOIs | |
Publication status | Published - 1 Feb 2015 |
Externally published | Yes |
Bibliographical note
Publisher Copyright:© 2014 Taylor & Francis.
Keywords
- Assembly system
- Contract design
- Inventory
- Random demand
- Random yield