Study on a Two-level Assembly Supply Chain under the Uncertainty of Demand and Lead Time

A two-level assembly supply chain is constituted by a component supplier and an assembler,and the supplier provides two different component parts for the assembler.In a single selling period the supply chain behavior is analyzed under the uncertainty of demand and the production lead times of component parts.By using game theory the assembling decides the assembly lead time and submits an order quantity to the supplier,at the same time,the supplier must determine when to produce component parts and how much to charge the assembler by considering the order quantity so as to maximize its total expected profit.The following results are concluded,first,lead time uncertainty entices the supply chain to decrease its order quantity;second,the sum of production lead times and assembling lead time in the decentralized supply chain is larger than that in the centralized supply chain,and the assembling lead time is independent of the production lead times of component parts;third,the extra lead time uncertainty impacting on the assembly supply chain is bigger than demand uncertainty.