How to Coordinate Integrated Supply Chain When Demand and Cost Disruptions Occur Simultaneously

Dongchuan XIE, Hong CHEN, Lai WEI

Abstract


Disruptions such as natural disasters, terrorism attacks, major public health events, financial crisis, machine failures and strikes etc. may have great impact on the operation of supply chain. An originally-coordinated supply chain cannot be coordinated because of some disruptions and the survival of the supply chain members can be influenced by other disruptions. A supply chain consisting of one supplier and one retailer is studied in this paper. The supply chain profit is maximized in the basic case. Disruption happens which makes the price sensitivity coefficient and the production cost changes simultaneously. The supplier only needs to adjust the retail price if the disruption is in a certain range. The supplier needs to adjust the retail price and the production quantities if the disruption is large enough. Finally, some numerical examples are illustrated to certify the results derived in this paper.

Keywords


Supply chain coordination; Game theory; Demand and cost disruptions

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References


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DOI: http://dx.doi.org/10.3968/6219

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