Two-stage supply chain

Cachon, G.P. and P.H. Zipkin. 1999. Competitive and cooperative inventory policies in a two-stage supply chain. Management Science, Vol.45,936-953. 

Aviv (2002a) used the framework described here to devise inventory control policies for various types of two-stage supply chain structures that face demand processes with early market signals. The demand process considered by Aviv (2002a) is more complex than (10.23), allowing both the retailer and the supplier observe signals (i.e., U-values) about future demands, starting from several periods in advance. We shall provide more details on Aviv s model in 5. 

Bl) Integration of production and outbound transportation. This typically takes place in a two-stage supply chain involving manufacturers and customers. Products are delivered from manufacturers to customers after they are produced by manufacturers. 

Hsiao, Y.-C. 2008. Integrated logistic and inventory model for a two-stage supply chain controlled by the re-order and shipping points with sharing information. International Journal of Production Economics, 115, 229-235. 

XYZ Company is looking at improving its distribution system. XYZ s 3-stage supply chain—a factory, two potential warehouse sites, and four retailers, is shown in Figure 5.5. 

In this section, we analyze the tax integrated model (TIM) by comparing with the weighted base model (WBM) proposed in Sect. 3, for a 8-stage supply chain shown in Fig. 2. For analysis, we assume a two-country (North and South) model, as in Grossman and Helpman (2003). We also assume the home country of the company to be North. With this assumption, for each stage of the 8-stage supply chain, the different alternatives could be,... 

Two distinct and simple business strategies for manufacturing household furniture may be described as the provision of either low-cost, short lifespan, or expensive, long lifespan products. The decision on which strategy to take is made at the conception stage of the business and may depend upon existing supply chain links, market opportunities or available workforce skill set for example. It is unlikely that such a strategic decision would ever be made... 

Distributors in the supply chain decrease the response time certainly. For example, Dell is a company which directly ships to the customer in an amount of time such as one or two weeks from the manufacturing stage. In such a situation, customer needs to wait and it increases the response time. However, in Radio Shack s case, the customer is able to see the products after distributors send the products to retailers. Adding more distributors may increase the product availability, lower transportation costs. The distributors increase the rate of retumabUity since it would be very hard to return the product to the manufacturing facility. 

In stages one through two of the model outlined above (refer to Figure 1.3), the processes were designed inside-out from the enterprise to the network. In this traditional design, the supply chain is insular. The supply chain is blind to what is happening in the market. 

CPFR is a good example of an industry s response to the need for supply chain change. But what general form might collaboration take between two or more trading partners An earlier article outlined a vision for Stage 3 supply chain collaboration efforts. " The term Stage 3 comes from the third, or supply chain, level as shown in Table 3-3. Multicompany collaboration features include ... 

The approaches listed above have value for both individual company and supply chain applications. Two other techniques have particular value in improving SCM practice during product design (1) discovery-driven planning and (2) the employment of stages and gates to manage product introduction. Both tools have natural extensions to supply chain formulation as the product is developed. 

Consider a two-stage, serial supply chain where the annual demand at stage 2 is D = 10,000 units. Fixed ordering costs at stages 1 and 2 are Ai = 400/order and A2 = 50/order, and inventory holding costs are hi = 10/unit/year and Izj = 15/unit/year. 

Indeed, the method used to generate the demand forecast at each stage in the supply chain can have a significant impact on the stream of orders placed upstream. Vollmann et al. (2005) provide a simple example to demonstrate the existence of the bullwhip effect. This example is repeated here, with some extensions, and shown in Table 3.6. Specifically, we extend what is a 10-period example from Vollmarm et al. to 20 periods that cover two repeating cycles of a demand stream with slight seasonality. In addition, we institute a few policy rules (1) that orders must be non-negative, (2) that... 

---