Disruption management in a two-period three-tier electronics supply chain

We study strategies to manage demand disruptions in a three-tier electronics supply chain consisting of an Electronics Manufacturing Services provider, an Original Equipment Manufacturer (OEM), and a Retailer. We model price sensitivity of consumer demand with the two functions commonly used for thi...

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Autores principales:	Johannes Danusantoso, Scott A. Moses
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2016
Materias:	stackelberg leader demand disruption supply chain coordination wholesale price contact Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/71cfc92a1fa241c0aaa828b0981c3c27
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spelling	oai:doaj.org-article:71cfc92a1fa241c0aaa828b0981c3c272021-12-02T10:44:29ZDisruption management in a two-period three-tier electronics supply chain2331-197510.1080/23311975.2015.1137138https://doaj.org/article/71cfc92a1fa241c0aaa828b0981c3c272016-12-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2015.1137138https://doaj.org/toc/2331-1975We study strategies to manage demand disruptions in a three-tier electronics supply chain consisting of an Electronics Manufacturing Services provider, an Original Equipment Manufacturer (OEM), and a Retailer. We model price sensitivity of consumer demand with the two functions commonly used for this purpose, linear and exponential, and introduce disruptions in the demand function. We assume each supply chain member faces an increasing marginal unit cost function. Our decentralized supply chain setting is governed by a wholesale price contract. The OEM possesses greater bargaining power and therefore is the Stackelberg leader. A penalty cost incurred by the Retailer is introduced to capture the cost of deviation from the original plan. We find exact analytical solutions of the effectiveness of managing the disruption when the consumer demand function is linear, and we provide numerical examples as an illustration when the consumer demand function is either linear or exponential. We show that the original production quantity exhibits some robustness under disruptions in both centralized and decentralized supply chains, while the original optimal pricing does not. We show that supply chain managers should not automatically react to an individual disruption, in certain cases it is best to leave the production plan unchanged.Johannes DanusantosoScott A. MosesTaylor & Francis Grouparticlestackelberg leaderdemand disruptionsupply chain coordinationwholesale price contactBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 3, Iss 1 (2016)
institution	DOAJ
collection	DOAJ
language	EN
topic	stackelberg leader demand disruption supply chain coordination wholesale price contact Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	stackelberg leader demand disruption supply chain coordination wholesale price contact Business HF5001-6182 Management. Industrial management HD28-70 Johannes Danusantoso Scott A. Moses Disruption management in a two-period three-tier electronics supply chain
description	We study strategies to manage demand disruptions in a three-tier electronics supply chain consisting of an Electronics Manufacturing Services provider, an Original Equipment Manufacturer (OEM), and a Retailer. We model price sensitivity of consumer demand with the two functions commonly used for this purpose, linear and exponential, and introduce disruptions in the demand function. We assume each supply chain member faces an increasing marginal unit cost function. Our decentralized supply chain setting is governed by a wholesale price contract. The OEM possesses greater bargaining power and therefore is the Stackelberg leader. A penalty cost incurred by the Retailer is introduced to capture the cost of deviation from the original plan. We find exact analytical solutions of the effectiveness of managing the disruption when the consumer demand function is linear, and we provide numerical examples as an illustration when the consumer demand function is either linear or exponential. We show that the original production quantity exhibits some robustness under disruptions in both centralized and decentralized supply chains, while the original optimal pricing does not. We show that supply chain managers should not automatically react to an individual disruption, in certain cases it is best to leave the production plan unchanged.
format	article
author	Johannes Danusantoso Scott A. Moses
author_facet	Johannes Danusantoso Scott A. Moses
author_sort	Johannes Danusantoso
title	Disruption management in a two-period three-tier electronics supply chain
title_short	Disruption management in a two-period three-tier electronics supply chain
title_full	Disruption management in a two-period three-tier electronics supply chain
title_fullStr	Disruption management in a two-period three-tier electronics supply chain
title_full_unstemmed	Disruption management in a two-period three-tier electronics supply chain
title_sort	disruption management in a two-period three-tier electronics supply chain
publisher	Taylor & Francis Group
publishDate	2016
url	https://doaj.org/article/71cfc92a1fa241c0aaa828b0981c3c27
work_keys_str_mv	AT johannesdanusantoso disruptionmanagementinatwoperiodthreetierelectronicssupplychain AT scottamoses disruptionmanagementinatwoperiodthreetierelectronicssupplychain
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Disruption management in a two-period three-tier electronics supply chain

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