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Decentralized supply chain coordination through auction markets: dynamic lot-sizing in distribution networks.
- Source :
- International Journal of Production Research; Oct2007, Vol. 45 Issue 20, p4715-4733, 19p, 3 Diagrams, 6 Charts, 3 Graphs
- Publication Year :
- 2007
-
Abstract
- As supply chains become bigger and dynamically structured involving multiple organizations with different interests, it is impossible for a single organization to control a whole supply chain. So, decentralization of decision rights is an inevitable facet of managing modern supply chains. However, controlling in a decentralized mode can fail without appropriate coordination mechanisms. When the agents of a supply chain are not willing to cooperate in terms of information sharing, the whole supply chain can exhibit expensive inefficiencies such as the bullwhip effect. In this paper, we design a trustworthy decentralized coordination mechanism for dynamic lot-sizing in distribution networks, as an effort to motivate information sharing. We design multiple auctions and each auction coordinates the plans of a supplier and its customers by trading the right of managing the supplier's inventory plan. The coordination mechanism makes a reasonable profit and the profit is divided in an agreeable way. Also, the profits are actual because of the capability of supporting a truth-telling environment. Therefore, the designed coordination mechanism is trustworthy in that it guarantees the right benefits to all the agents in return for information sharing. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00207543
- Volume :
- 45
- Issue :
- 20
- Database :
- Complementary Index
- Journal :
- International Journal of Production Research
- Publication Type :
- Academic Journal
- Accession number :
- 26447908
- Full Text :
- https://doi.org/10.1080/00207540600844050