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Altruistic behaviour in a two-echelon supply chain with unmatched proportional feedback controllers

Disney, Stephen Michael and Hosoda, Takamichi 2009. Altruistic behaviour in a two-echelon supply chain with unmatched proportional feedback controllers. International Journal of Intelligent Systems Technologies and Applications 6 (3/4) , pp. 269-286. 10.1504/IJISTA.2009.024257

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Abstract

We study a two-echelon supply chain with first order autoregressive demand and unit replenishment lead-times. Each echelon of the supply chain uses conditional expectation to generate Minimum Mean Squared Error forecasts. Both echelons use these forecasts inside the 'Order-Up-To' policy to generate replenishment orders. We investigate three different scenarios. The first is when each echelon aims to minimise their own local inventory holding and backlog costs. The second scenario is concerned with an altruistic retailer who is willing and able to sacrifice some of his own performance for the benefit of the total supply chain. The retailer does this by smoothing the demand placed on the manufacturer by using a matched proportional controller in the inventory and Work-In-Progress feedback loops. The third scenario is concerned with an altruistic retailer with two, unmatched controllers. The matched controller case outperforms the traditional case by 14.1%; the unmatched controller case outperforms the matched controller case by 4.9%.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Centre for Advanced Manufacturing Systems At Cardiff (CAMSAC)
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce
Uncontrolled Keywords: Altruistic behaviour ; Collaboration ; Coordination ; Multi-echelon inventory ; Order-up-to policy ; Supply chain management ; SCM ; Feedback control ; Two-echelon supply chains
Publisher: Inderscience Publishers
ISSN: 1740-8865
Date of First Compliant Deposit: 30 March 2016
Last Modified: 13 Oct 2017 09:07
URI: http://orca.cf.ac.uk/id/eprint/21684

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