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Benefit of Supply Chain Coordination
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- Authors
- Issue Date
- 2003
- Citation
- Seoul Journal of Business, Vol.9 No.1, pp. 47-66
- Keywords
- inventory control ; logistics ; distribution ; lot sizing ; lead time
- Abstract
- In this paper, we deal with a supply chain in which an assembler
orders parts from a supplier. The assembler decides both order size and
lead time for the supplier. In response, the supplier will determine its
production capacity to fulfill the order from the assembler. Compared
with the case where the assembler and the supplier maximize their own
individual profits, the supply chain coordination offers a Pareto efficient
solution and can give more profit to both parties. The implication of this
paper is that the order requested from an assembler to a parts supplier
such as in JIT delivery may damage the overall profit in the chain.
Therefore, the parties involved had better cooperate with each other
rather than emphasizing their own sakes and eventually leading to
lower profits.
- ISSN
- 1226-9816
- Language
- English
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