July  2005, 1(3): 275-287. doi: 10.3934/jimo.2005.1.275

Supply contract model with service level constraint

1. 

Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing 100080, China

2. 

Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing, 100190, China

3. 

Department of Intelligence and Informatics, Konan University, 8-9-1 Okamoto, Kobe 658-8501

Received  August 2004 Revised  March 2005 Published  July 2005

This paper addresses a new topic of supply chain management: service level constraint for a supply contract model in a buyer's perspective. The concept of order fill rate is introduced in the supply contract model as a measurement of customer service level. The buyer's optimal ordering decisions in both stages are derived by using the dynamic programming approach. The impact of the service level on the making of optimal decisions is analyzed. The main results include that: (1) the optimal ordering quantity with service level constraint is larger than or equal to that without constraint; (2) the optimal service level setting of the buyer is determined by the system parameters. The results presented in this paper provide insights for managers looking to find a tradeoff between profit maximization and customer service level.
Citation: Jun Wu, Shouyang Wang, Wuyi Yue. Supply contract model with service level constraint. Journal of Industrial and Management Optimization, 2005, 1 (3) : 275-287. doi: 10.3934/jimo.2005.1.275
[1]

Suresh P. Sethi, Houmin Yan, Hanqin Zhang, Jing Zhou. Information Updated Supply Chain with Service-Level Constraints. Journal of Industrial and Management Optimization, 2005, 1 (4) : 513-531. doi: 10.3934/jimo.2005.1.513

[2]

Honglin Yang, Jiawu Peng. Coordinating a supply chain with demand information updating. Journal of Industrial and Management Optimization, 2022, 18 (2) : 843-872. doi: 10.3934/jimo.2020181

[3]

Han Zhao, Bangdong Sun, Hui Wang, Shiji Song, Yuli Zhang, Liejun Wang. Optimization and coordination in a service-constrained supply chain with the bidirectional option contract under conditional value-at-risk. Discrete and Continuous Dynamical Systems - S, 2022  doi: 10.3934/dcdss.2022021

[4]

Weihua Liu, Xinran Shen, Di Wang, Jingkun Wang. Order allocation model in logistics service supply chain with demand updating and inequity aversion: A perspective of two option contracts comparison. Journal of Industrial and Management Optimization, 2021, 17 (6) : 3269-3295. doi: 10.3934/jimo.2020118

[5]

Xiaohui Ren, Daofang Chang, Jin Shen. Optimization of the product service supply chain under the influence of presale services. Journal of Industrial and Management Optimization, 2021  doi: 10.3934/jimo.2021130

[6]

Kun Fan, Wenjin Mao, Hua Qu, Xinning Li, Meng Wang. Study on government subsidy in a two-level supply chain of direct-fired biomass power generation based on contract coordination. Journal of Industrial and Management Optimization, 2022  doi: 10.3934/jimo.2022049

[7]

Tsan-Ming Choi. Quick response in fashion supply chains with dual information updating. Journal of Industrial and Management Optimization, 2006, 2 (3) : 255-268. doi: 10.3934/jimo.2006.2.255

[8]

Fei Cheng, Shanlin Yang, Ram Akella, Xiaoting Tang. An integrated approach for selection of service vendors in service supply chain. Journal of Industrial and Management Optimization, 2011, 7 (4) : 907-925. doi: 10.3934/jimo.2011.7.907

[9]

Tinghai Ren, Kaifu Yuan, Dafei Wang, Nengmin Zeng. Effect of service quality on software sales and coordination mechanism in IT service supply chain. Journal of Industrial and Management Optimization, 2021  doi: 10.3934/jimo.2021165

[10]

Yafei Zu. Inter-organizational contract control of advertising strategies in the supply chain. Journal of Industrial and Management Optimization, 2021  doi: 10.3934/jimo.2021126

[11]

Sushil Kumar Dey, Bibhas C. Giri. Coordination of a sustainable reverse supply chain with revenue sharing contract. Journal of Industrial and Management Optimization, 2022, 18 (1) : 487-510. doi: 10.3934/jimo.2020165

[12]

Juliang Zhang, Jian Chen. Information sharing in a make-to-stock supply chain. Journal of Industrial and Management Optimization, 2014, 10 (4) : 1169-1189. doi: 10.3934/jimo.2014.10.1169

[13]

Feimin Zhong, Wei Zeng, Zhongbao Zhou. Mechanism design in a supply chain with ambiguity in private information. Journal of Industrial and Management Optimization, 2020, 16 (1) : 261-287. doi: 10.3934/jimo.2018151

[14]

Ziyuan Zhang, Liying Yu. Joint emission reduction dynamic optimization and coordination in the supply chain considering fairness concern and reference low-carbon effect. Journal of Industrial and Management Optimization, 2021  doi: 10.3934/jimo.2021155

[15]

Zhi-tang Li, Cui-hua Zhang, Wei Kong, Ru-xia Lyu. The optimal product-line design and incentive mechanism in a supply chain with customer environmental awareness. Journal of Industrial and Management Optimization, 2021  doi: 10.3934/jimo.2021204

[16]

Joseph Geunes, Panos M. Pardalos. Introduction to the Special Issue on Supply Chain Optimization. Journal of Industrial and Management Optimization, 2007, 3 (1) : i-ii. doi: 10.3934/jimo.2007.3.1i

[17]

Mingyong Lai, Hongzhao Yang, Erbao Cao, Duo Qiu, Jing Qiu. Optimal decisions for a dual-channel supply chain under information asymmetry. Journal of Industrial and Management Optimization, 2018, 14 (3) : 1023-1040. doi: 10.3934/jimo.2017088

[18]

Man Yu, Erbao Cao. Trade credit and information leakage in a supply chain with competing retailers. Journal of Industrial and Management Optimization, 2022  doi: 10.3934/jimo.2022042

[19]

Qiang Lin, Ying Peng, Ying Hu. Supplier financing service decisions for a capital-constrained supply chain: Trade credit vs. combined credit financing. Journal of Industrial and Management Optimization, 2020, 16 (4) : 1731-1752. doi: 10.3934/jimo.2019026

[20]

Jing Shi, Tiaojun Xiao. Service investment and consumer returns policy in a vendor-managed inventory supply chain. Journal of Industrial and Management Optimization, 2015, 11 (2) : 439-459. doi: 10.3934/jimo.2015.11.439

2020 Impact Factor: 1.801

Metrics

  • PDF downloads (88)
  • HTML views (0)
  • Cited by (1)

Other articles
by authors

[Back to Top]