Supply chain analysis for standard and customized products with postponement

Meimei Zheng, Xiaoqian Shi, Ershun Pan, Kan Wu*

*Corresponding author for this work

Research output: Contribution to journalJournal Article peer-review

10 Scopus citations

Abstract

We analyze optimal production and order decisions for standard and customized products in a manufacturer-retailer system, whereby the retailer is offered two order opportunities by the manufacturer. Standard products are produced in make-to-stock fashion, whereas customized products are produced using a postponement strategy. In the decentralized system, the retailer's first order decision is independent of the parameters of customized products. Notably, it is not always profitable for the manufacturer to produce standard products or customized products. We derive the conditions in which the manufacturer is willing to produce both kinds of products or only one kind of product. A cost-sharing contract is designed to coordinate the manufacturer's and retailer's decisions in the supply chain with both standard and customized products. The results show that, with coordination, the contract can render both the manufacturer and retailer to obtain better profits.

Original languageEnglish
Article number107860
JournalComputers and Industrial Engineering
Volume164
DOIs
StatePublished - 02 2022

Bibliographical note

Publisher Copyright:
© 2021 Elsevier Ltd

Keywords

  • Postponement
  • Standard and customized products
  • Supply chain coordination
  • Supply chain management

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