Order timing strategies in a single-supplier, multi-retailer system


BAKAL İ. S. , Geunes J.

INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH, vol.48, no.8, pp.2395-2412, 2010 (Journal Indexed in SCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 48 Issue: 8
  • Publication Date: 2010
  • Doi Number: 10.1080/00207540902810528
  • Title of Journal : INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
  • Page Numbers: pp.2395-2412
  • Keywords: pricing theory, operations management, operations planning, supply chain management, inventory control, inventory management, supply chain dynamics, logistics, lot sizing, STYLE-GOODS, CHAIN, DEMAND, INFORMATION, COMMITMENT, DECISIONS, CONTRACTS, OPPORTUNITIES, QUANTITIES, ALLOCATION

Abstract

The timing of retailer order placement is an important factor in supply chain performance in systems with uncertain end-customer demands. Retailers often prefer short order lead times, which permits the resolution of demand uncertainty prior to order placement, and reduces the risks associated with excess inventory. Suppliers, in contrast, prefer long lead times, in order to match supply output with retailer demand. These conflicting preferences create tension between a supplier and retailers regarding order timing preferences. This paper considers order timing preferences within a strategic framework involving a supplier and one of its retailers in a multiple-retailer system. We identify and explore several mechanisms a supplier can use within this framework to induce early retailer order placement and improve expected cost performance.