Supply Chain Coordination Mechanisms: New Approaches for Collaborative Planning (Lecture Notes in Economics and Mathematical Systems Book 628)

Integrated supply chain planning is well understood by theory and widely applied in practice – however, only with respect to intra-organisational supply chains. In inter-organisational supply chains, an additional, yet unresolved problem arises: due to confidentiality reasons, decentralized parties keep their local data private, which prevents an integrated planning. Local planning procedures such as upstream planning, which are usually applied then, result in suboptimal solutions for the supply chain as a whole. In this work, new mechanisms for inter-organizational, collaborative supply chain planning are presented. These mechanisms are able to identify the systemwide optimum for several classes of supply chain planning problems. They can be applied by two or more self-interested parties and do not require a trusted third party. Extensive computational tests for randomly generated and real-word data suggest a favorable performance of these mechanisms. Cover 1 Supply Chain Coordination Mechanisms - New Approaches for Collaborative Planning 4 ISBN 9783642028328 e-ISBN 9783642028335 5 Foreword 8 Preface 10 Contents 12 Abbreviations 14 Nomenclature 16 Chapter 1 Introduction 24 1.1 Motivation and Goals of This Work 24 1.2 Methodology 25 1.3 Outline 25 Chapter 2 Supply Chain Planning and Coordination 28 2.1 Supply Chain Planning 28 2.1.1 Defnitions and Overview 28 2.1.2 Master Planning 31 2.2 Model Formulations for Master Planning 32 2.2.1 Generic Master Planning Model 33 2.2.2 Extension to Lot-Sizing 35 2.3 Decentralized Planning and Coordination 43 2.3.1 Basic Defnitions 43 2.3.2 Decentralized Supply Chain Planning 47 2.3.3 Upstream Vs. Collaborative Planning 53 Chapter 3 Coordination Mechanisms for Supply Chain Planning 58 3.1 Symmetric Information 58 3.1.1 Non-cooperative Game Theory 59 3.1.2 Cooperative Game Theory 64 3.2 One-Sided Information Asymmetry 66 3.2.1 Signaling 66 3.2.2 Screening 68 3.3 Multilateral Information Asymmetry 71 3.3.1 Auctions and Their Application to Supply Chain Coordination 71 3.3.2 Mechanisms with Focus on Proposal Generation 74 Chapter 4 New Coordination Schemes 86 4.1 Generic Scheme for Linear Programming and Analytical Results 87 4.1.1 Version with Iterative, Unilateral Exchange of Cost Information 87 4.1.2 Version with One-Shot Exchange of Cost Information 103 4.2 Scheme for Uncapacitated Dynamic Lot-Sizing and Analytical Results 105 4.3 Application to Master Planning 122 4.3.1 Linearization 122 4.3.2 Adaptation to Master Planning 126 4.3.3 Generic Modifcations 134 4.3.4 Modifcations for Master Planning 137 4.4 Customizations 143 4.4.1 Master Planning with Lot-Sizing 143 4.4.2 Voluntary Compliance 145 4.4.3 Lost Sales 146 4.4.4 Multiple Suppliers 149 Chapter 5 New Coordination Mechanisms 152 5.1 Surplus Sharing Determined by the Informed Party 153 5.2 Surplus Sharing Determined by Lump-Sum Payments 156 5.3 Surplus Sharing by a Double Auction 164 5.4 Comparison of Mechanisms and Discussion 172 5.5 Application with Rolling Schedules 174 Chapter 6 Computational Tests of Coordination Schemes 178 6.1 General Master Planning Model 178 6.1.1 Generation of Test Instances and Performance Indicators 178 6.1.2 Analysis of Solutions for the Generic Scheme 185 6.1.3 Analysis of Solutions for the Modifed Scheme 187 6.2 Uncapacitated Lot-Sizing Problem 192 6.2.1 Generation of Test Instances 192 6.2.2 Analysis of Solutions 194 6.3 Multi-level Capacitated Lot-Sizing Problem 197 6.4 Models for Campaign Planning 202 6.4.1 Generation of Test Instances 202 6.4.2 Analysis of Solutions 203 6.5 Real-World Supply Chain Planning Problems 207 6.5.1 Planning Problems and Model Formulation 208 6.5.2 Analysis of Solutions 215 Chapter 7 Summary and Outlook 220 References 224 Front Matter....Pages i-xxii Introduction....Pages 1-3 Supply Chain Planning and Coordination....Pages 5-34 Coordination Mechanisms for Supply Chain Planning....Pages 35-61 New Coordination Schemes....Pages 63-127 New Coordination Mechanisms....Pages 129-154 Computational Tests of Coordination Schemes....Pages 155-196 Summary and Outlook....Pages 197-199 Back Matter....Pages 201-211