Supply Chain Coordination for Perishable Products under Yield and Demand Uncertainty: A Simulation Approach

수요와 수율의 불확실성을 고려한 공급망 조정

Abstract

Purpose: This study developed a simulation model that incorporates the uncertainty of demand and yield to obtain optimized results for supply chain coordination within environmental constraints. The objective of this study is to examine whether yield management for perishable products can achieve the goal of supply chain coordination between a single buyer and a single supplier under a variety of environmental conditions. Methods: We investigated the efficiency of a revenue-sharing contract and a wholesale price contract by considering demand and yield uncertainty, profit maximizing ratio, and success ratio. The implications for environmental variation were derived through a comparative analysis between the wholesale price contract and the revenue-sharing contract. We performed Monte Carlo simulations to give us the results of an optimized supply chain within the environments defined by the experimental factors and parameters. Results: We found that a revised revenue-sharing contracting model was more efficient than the wholesale price contract model and allowed all members of the supply chain to achieve higher profits. First, as the demand variation (${\sigma}$) increased, the profit of the total supply chain increased. Second, as the revenue-sharing ratio (${\Phi}$) increased, the profits of the manufacturer gradually decreased, while the profits of the retailer gradually increased, and this change was linear. Third, as the quality of yield increased, the profits of suppliers appear to increased. At last, success rate was expressed as the profit increased in the revenue-sharing contract compared to the profit increase in the wholesale price contract. Conclusion: The managerial implications of the simulation findings are: (1) a strategic approach to demand and yield uncertainty helps in efficient resource utilization and improved supply chain performance, (2) a revenue-sharing contract amplifies the effect of yield uncertainty, and (3) revised revenue-sharing contracts fetch more profits for both buyers and suppliers in the supply chain.

Figure 1. The change in profit maximizing ratio for demand variation (σ) and revenue-sharing ratio (Φ) (α=0.7)

Figure 2. The change in profit maximizing ratio for demand variation (σ) and yield (α) (Φ = 0.65)

Figure 3. Change in success rae for demand variation (σ) and revenue-sharing ratio (Φ) (α = 0.7)

Figure 4. Change in success rate for demand variation (σ) and yield (α) (Φ = 0.65)

Table 1. Input Parameters and Experimental Conditions

Table 2. The change in profit maximizing ratio for demand variation (σ) and revenue-sharing ratio (Φ) (α=0.7)

Table 3. The change in profit maximizing ratio for demand variation (σ) and yield (α) (Φ = 0.65)

Table 4. The change in profit maximizing ratio for yield (α) and revenue-sharing ratio (Φ) σ = 0.2)

Table 5. Change in success rae for demand variation (σ) and revenue-sharing ratio (Φ) (α = 0.7)

Table 6. Change in success rate for demand variation (σ) and yield (α) (Φ = 0.65)

Table 7. Change in success rate for yield (α) and revenue-sharing ratio (Φ) (σ = 0.2)