Optimization of single outsourcer–single subcontractor outsourcing relationship under reliability and maintenance constraints
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The aim of this research is to balance the trade-off between two echelons of a supply chain consisting of a single outsourcer and a single subcontractor under a win–win partnership contract.Abstract:
In this paper, we focus on outsourcing activities optimization problem in single period setting. In some situations, capacity planning or outsourcing is a one-time event and can be modeled as a single period problem. The aim of this research is to balance the trade-off between two echelons of a supply chain consisting of a single outsourcer and a single subcontractor. Each part is composed of a failure-prone single machine that produces one product type to satisfy market requirements. The outsourcer’s manufacturing system is not able to satisfy the demand; in this case, outsourcing is allowed to recover the lack of capacity. We consider that the subcontractor can satisfy the demands of strategic clients and rent his machine for the outsourcer under a win–win partnership contract. We assume that the hazard failure rate depends on time and the adopted manufacture rate. When unforeseen failures occur, minimal repairs are implemented. Overhaul can be performed to reduce the degradation effects. Hence, we develop a mathematical model to define a profitability interval so that both parties of supply chain can be considered as winners. We seek to determine the contract parameters that suit both parties (duration, start and end dates, the production and outsourcing rates). Then, we develop an exact algorithm to solve the problem of single period optimization, which offers a better execution time through a series of test problems. Finally, we consider a sensitivity analysis based on outsourcing parameters (cost, periodicities, etc) to analyze their effects on partial costs and individual profit of each part, as well as the total profit generated by the system.read more
Citations
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Integrated production-transshipment control policy for a two-location unreliable manufacturing system
TL;DR: In this article , an integrated production-transshipment control policy is proposed with the aim of minimizing the total cost that comprises holding, backlog and transshipment costs, which is obtained using stochastic dynamic programming.
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Production and subcontracting control for an unreliable manufacturing system with setups
M. Assid,Ali Gharbi,Adnène Hajji +2 more
TL;DR: An experimental optimisation approach is adopted to determine the optimal control parameters which minimise the average total cost and valuable insights providing a better understanding of interactions involving production, setup, and subcontracting are discussed.
References
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Coordinated supply chain management
TL;DR: In this paper, the authors review the literature addressing coordinated planning between two or more stages of the supply chain, placing particular emphasis on models that would lend themselves to a total supply chain model.
Journal ArticleDOI
Coordinating Investment, Production, and Subcontracting
Sesh Murthy,Rama Akkiraju,Richard Goodwin,Pinar Keskinocak,John Rachlin,Frederick Y. Wu,James Tien-Cheng Yeh,Robert M. Fuhrer,Santhosh Kumaran,Alok Aggarwal,Martin C. Sturzenbecker,Ranga Jayaraman,Robert Daigle,Jan A. Van Mieghem +13 more
TL;DR: In this paper, the authors analyze and present outsourcing conditions for three contract types: (1) price-only contracts where an ex-ante transfer price is set for each unit supplied by the subcontractor, (2) incomplete contracts, where both parties negotiate over the subcontracting transfer, and (3) state-dependent contracts for which they show an equivalence result.
Journal ArticleDOI
Planning and coordination of production and distribution facilities for multiple commodities
TL;DR: An efficient heuristic solution procedure that utilizes the solution generated from a Lagrangian relaxation of the problem is presented and results of extensive tests indicate that the solution method is both efficient and effective.
Journal ArticleDOI
Negotiation-based collaborative planning between supply chains partners
Gregor Dudek,Hartmut Stadtler +1 more
TL;DR: This paper proposes a non-hierarchical, negotiation-based scheme which can be used to synchronize plans between two independent supply chain partners linked by material flows and shows how modified versions of these models can be utilized for evaluating material orders or supplies proposed by the supply chain partner and for generating counter-proposals.
Book ChapterDOI
A Review on Supply Chain Coordination: Coordination Mechanisms, Managing Uncertainty and Research Directions
TL;DR: In this article, the authors identify the coordination mechanisms which helps in addressing the uncertainty in supply chain and achieving supply chain coordination, and they propose a unified system and coordinate with each other.