Using simulation optimization as a decision support tool for supply chain coordination with contracts

Authors:
Hamidreza Eskandari;Mohamad Darayi;Christopher D. Geiger
Affiliations:
Tarbiat Modares University, Tehran, Iran;Tarbiat Modares University, Tehran, Iran;University of Central Florida, Orlando, FL
Venue:
Proceedings of the Winter Simulation Conference
Year:
2010

Citing 3
Cited 0

Simulation-based optimization: practical introduction to simulation optimization

Proceedings of the 35th conference on Winter simulation: driving innovation
Optimizing inspection strategies for multi-stage manufacturing processes using simulation optimization

Proceedings of the 40th Conference on Winter Simulation
A framework for evaluation of coordination by contracts: A case of two-level supply chains

Computers and Industrial Engineering

Quantified Score

Hi-index	0.00

Visualization

Abstract

This paper studies the issue of channel coordination for a supply chain consisting of one supplier and two retailers, facing stochastic demand that is sensitive to both sales effort and retail price. We develop a decision support tool using simulation optimization for supply chain coordination with revenue sharing or buyback contract. In order to represent a real competitive price and effort dependent demand, a new linear demand model is proposed. Due to the stochastic nature of the market demand and the interaction between decision variables, simulation could help us modeling and analyzing the problem. Simulation optimization is then used to find the optimum or near optimum set of decision variables in the cases of centralized supply chain and coordinated supply chain with contracts.