A geometric representation of profits in a supply chain network

Serin Y. Y.

INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS, vol.137, no.1, pp.36-44, 2012 (SCI-Expanded) identifier identifier


Economists express profits as areas representing producer's surplus or consumer's surplus corresponding to a pair of supply and demand functions. A similar representation can be employed in a supply chain network where there can be several producers/suppliers and several consumers/retailers in various trading situations. We aim to graphically represent the profits corresponding to a combination of the decisions of all participants in a supply chain, simultaneously, as areas of non-overlapping regions on the same graph. This way, the shares of the participants in the total can be visually observed and the interdependencies and the inefficiencies in the chain can be detected where the decisions and the corresponding profits are generally interdependent. Such a visual tool can be used in evaluating as well as in designing a supply chain. (C) 2012 Elsevier B.V. All rights reserved.