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Coordinating supply chain contracts with fuzzy demand

Ling-yu Huo, Bingwu Liu, Fang Yan

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Abstract

In a two-stage supply chain composed of one supplier and one retailer, the supply chain coordination mechanism in fuzzy demand environment is researched. The market demands are regarded as fuzzy variable. The models of centralized decision-making, the return contract and revenue sharing contract are built based on credibility distribution and their optimal policies are also proposed under uncertain theory. Finally, take the triangular fuzzy numbers as an example, a numerical is given to illustrate the models and analyze the influence of parameters on the models. It shows that the contracts can coordinate the supply chain with fuzzy demand. The different wholesale price and return price tactics in return contract, and the different wholesale price in revenue sharing contract can be got by using different parameters. The fuzzy expected value of the profit for each actor in return contract can be equaled with that in revenue sharing contract by offered certain contract parameters.

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What this paper is about

In a two-stage supply chain composed of one supplier and one retailer, the supply chain coordination mechanism in fuzzy demand environment is researched. The market demands are regarded as fuzzy variable. The models of centralized decision-making, the return contract and revenue sharing contract are built based on credibility distribution and their optimal policies are also proposed under uncertain theory. Finally, take the triangular fuzzy numbers as an example, a numerical is given to illustrate the models and analyze the influence of parameters on the models. It shows that the contracts can coordinate the supply chain with fuzzy demand. The different wholesale price and return price tactics in return contract, and the different wholesale price in revenue sharing contract can be got by using different parameters. The fuzzy expected value of the profit for each actor in return contract can be equaled with that in revenue sharing contract by offered certain contract parameters.

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Available abstract

In a two-stage supply chain composed of one supplier and one retailer, the supply chain coordination mechanism in fuzzy demand environment is researched. The market demands are regarded as fuzzy variable. The models of centralized decision-making, the return contract and revenue sharing contract are built based on credibility distribution and their optimal policies are also proposed under uncertain theory. Finally, take the triangular fuzzy numbers as an example, a numerical is given to illustrate the models and analyze the influence of parameters on the models. It shows that the contracts can coordinate the supply chain with fuzzy demand. The different wholesale price and return price tactics in return contract, and the different wholesale price in revenue sharing contract can be got by using different parameters. The fuzzy expected value of the profit for each actor in return contract can be equaled with that in revenue sharing contract by offered certain contract parameters.

Key concepts: Supply chain, Fuzzy logic, Revenue sharing, Profit (economics), Microeconomics, Credibility, Revenue, Supply chain management

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