Informatics Publishing Limited

Burra Karuna Kumar ¹, Dega Nagaraju ², S. Narayanan ²

Affiliations
1 Department of Mechanical Engineering, Gudlavalleru Engineering College, Gudlavalleru - 521356, Andhra Pradesh, IN
2 Department of Manufacturing Engineering, School of Mechanical Engineering, VIT University, Vellore - 632014, Tamil Nadu, IN

Abstract

Background/Objectives: The objective of the work carried out in this paper is to present the literature based on different Supply Chain (SC) coordination mechanisms. Also, it is intended to explore various coordination models proposed by various researchers from the literature. Methods/Statistical Analysis: The literature is reviewed by considering 142 articles published from 2000 to till date and classified as two-level models and three-level models. All these articles are further discussed based on few coordination mechanisms such as trade credit, quantity discounts, revenue sharing contract and information sharing. In addition, the literature is reviewed on Vendor Managed Inventory and price dependent demand variations and the coordination issues are discussed. Findings: From the findings of this research, it is observed that sufficient volume of papers reported the coordination mechanism in a two-level SC. The number of papers discussing three-level SC coordination is few in number. Especially, in the perspective of trade credit and quantity discount option, very few articles are reported discussing coordination in a three-level SC. Further, it is also found that most of the articles addressed the coordination mechanism incorporating ordering and carrying costs. Very few articles addressed the implications of transportation cost in SC coordination mechanism. Application/Improvement: From the outcomes of this work, it is observed that study of the effect of space cost and advertisement cost on SC performance is highly significant. The use of simulation is highly emphasized as the activities of SC are becoming highly dynamic and challenging with the ever growing global competition.

Keywords

Coordination Mechanisms, Global Competition, Inventory, Three-Level Models, Two-Level Models.

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Seelam Krugon ¹, Dega Nagaraju ²

Affiliations
1 Mechanical Engineering, Bapatla Engineering College, Bapatla - 522101, Andhra Pradesh, IN
2 Manufacturing Division, School of Mechanical Engineering, VIT University, Vellore - 632014, Tamil Nadu, IN

Abstract

Background/Objectives: This paper describes about the optimal values of the variables decision and function of objective of the entire supply chain under credit period with price dependent demand. Methods/Statistical Analysis: Initially the problem is framed with the expressions of the overall variable cost of the retailer and manufacturer is developed separately. Later the problem can be organised with the expressions of the overall variable cost of the retailer and manufacturer is developed for the entire supply chain as a function of retailers ordering costs and manufacturer set up costs along with carrying costs, and transportation cost. Findings: Numerical example is illustrated along with computer programme is solved in MATLAB. The model is solved for optimal values of cycle time, inventory level, number of shipments and the total annual cost of the individual entities and the entire supply chain. Also, the sensitivity analysis is carried out. From the research findings, it is evident that with credit period interpretation, the total annual cost is decreased with increase in trade credit. Applications/Improvements: Based on the research findings, it is concluded that total annual relevant cost of the supply chain becomes less, if the manufacturer permits to delay the retailer payments in more number of days.

Keywords

Cycle Time, Credit Period, Inventory Decisions, Price Dependent Demand and Inventory System.

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