Skip to main content
SpringerLink
Log in

Modeling and optimization of two-stage procurement in dual-channel supply chain

  • Published:
Information Technology and Management Aims and scope Submit manuscript

Abstract

An online marketing platform should be designed to fairly take the benefits of buyers and suppliers into consideration based on their risk preferences and business strategies. In this paper, the dual-channel supply chain models are developed to implement the risk-averse strategy for buyers and risk-neutral strategy for suppliers, respectively. The buyers under the consideration are the manufacturers who acquire raw materials, parts, or components to make their final products. The major factors in the developed models include the risk preferences of buyers and suppliers, random price fluctuations of goods, and varying demands of final products. To reflect the purchasing practice of a manufacturer, (1) a supply chain is considered to have two supply channels, i.e., contract-based purchase with a lead-time before the goods are used and a direct purchase from online spot markets when the goods are used; (2) the time factor on decision making is specially taken into account, and the procurements are divided into the contract stage of purchase and online stage of purchase. Gaming analysis is conducted to develop the supply chain models for manufactures and suppliers to implement their purchasing or pricing strategies. The simulation is conducted and the result has shown that two-stage purchases in a dual-channel supply chain have improved the performances of suppliers and manufacturers in terms of the profits they can make, their supply–demand relations, and their adjustability to uncertainties in globalized and segmented markets. The proposed model has its significance for manufacturers to better control the price risk of goods and the demand risk of final products; on the other hand, suppliers can benefit from adjusting dynamic sales using online spot markets.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

References

  1. Bi ZM (2011) Revisit system architecture for sustainable manufacturing. J Sustain 3(9):1323–1340

    Article  Google Scholar 

  2. Bi ZM, Lang SYT, Shen WM (2008) Reconfigurable manufacturing systems: the state of the art. Int J Prod Res 46(4):967–992

    Article  Google Scholar 

  3. Black JT, Kohser RA (2012) DeGarmo’s materials and processes in manufacturing. Wiley, 11th edition, ISBN : 978-0-470-92467-9

  4. Cai G (2010) Channel selection and coordination in dual-channel supply chains. J Retail 86(1):22–36

    Article  Google Scholar 

  5. Cai G, Zhang ZG, Zhang M (2009) Game theoretical perspectives on dual-channel supply chain competition with price discounts and pricing schemes. Int J Prod Econ 117(1):80–96

    Article  Google Scholar 

  6. Cao W, Xu L, Liang L, Chaudhry S (2012) The impact of team task and job engagement on the transfer of tacit knowledge in e-business virtual teams. Inf Technol Manage 13(4):333–340

    Article  Google Scholar 

  7. Chang Z, Jiang F (2004) Coordination mechanism between electronic markets and contract market in supply chain. J Huazhong Univ Sci Technol 32:111–113

    Google Scholar 

  8. Chen X, Hao G, Li L (2014) Channel coordination with a loss-verse retailer and option contracts. Int J Prod Econ 150:52–57

    Article  Google Scholar 

  9. Cheng S, Zhang H, Lu J (2004) Supply chain modeling and simulation of dual-channel market of manufacturing enterprise. Comput Integr Manuf Syst 10(5):519–522 (in Chinese)

    Google Scholar 

  10. Chiang WK, Chhajed D, Hess JD (2003) Direct marketing, indirect profits: a strategic analysis of dual-channel supply chain design. Manage Sci 49(1):1–20

    Article  Google Scholar 

  11. Chiang WK, Monahan GE (2005) Managing inventories in a two-echelon dual-channel supply chain. Eur J Oper Res 162(2):325–341

    Article  Google Scholar 

  12. Eeckhoudt L, Gollier C, Schlesinger H (1995) The risk-averse (and prudent) newsboy. Manage Sci 41(5):786–794

    Article  Google Scholar 

  13. Fisher MA, Raman A (1996) Reducing the cost of demand uncertainty through accurate response to early sales. Oper Res 44(1):87–99

    Article  Google Scholar 

  14. Golovachkina N, Bradley J (2003) Supplier-manufacturer relationships under forced compliance contracts. Manuf Serv Oper Manage 5(1):67–69

    Article  Google Scholar 

  15. Grey W, Olavson T, Shi D (2005) The role of e-marketplaces in relationship-based supply chains: a survey. IBM Syst J 44(1):109–123

    Article  Google Scholar 

  16. Guo J, Xu L, Gong Z, Che C, Chaudhry S (2012) Semantic inference on heterogeneous e-marketplace activities. IEEE Trans Syst Man Cybern Part A Syst Hum 42(2):316–330

    Article  Google Scholar 

  17. Guo J, Xu L, Xiao G, Gong Z (2012) Improving multilingual semantic interoperation in cross-organizational enterprise systems through concept disambiguation. IEEE Trans Ind Inf 8(3):647–658

    Article  Google Scholar 

  18. Hua G, Wang S, Cheng TCE (2010) Price and lead time decisions in dual-channel supply chains. Eur J Oper Res 205(1):113–126

    Article  Google Scholar 

  19. Lam C, Ip W (2012) An improved spanning tree approach for the reliability analysis of supply chain collaborative network. Enterp Inf Syst 6(4):405–418

    Article  Google Scholar 

  20. Li L (2011) Assessing the relational benefits of logistics services perceived by manufacturers in supply chain. Int J Prod Econ 132:58–67

    Article  Google Scholar 

  21. Li L (2012) Effects of enterprise technology on supply chain collaboration: analysis of China-linked supply chain. Enterp Inf Syst 6(1):55–77

    Article  Google Scholar 

  22. Li L (2013) Technology designed to combat fakes in the global supply chain. Bus Horiz 56(2):167–177

    Article  Google Scholar 

  23. Li L (2013) The path to made-in-China: how it was done and future prospects. Int J Prod Econ 146(1):4–13

    Article  Google Scholar 

  24. Matook S, Lasch R, Tamaschke R (2009) Supplier development with benchmarking as part of a comprehensive supplier risk management framework. Int J Oper Prod Manage 29(3):241–267

    Article  Google Scholar 

  25. Paulraj D, Swamynathan S, Madhaiyan M (2012) Process model-based atomic service discovery and composition of composite semantic web services using web ontology language for services (OWL-S). Enterp Inf Syst 6(4):445–471

    Article  Google Scholar 

  26. Seifert RW, Thonemann UW, Hausman WH (2004) Optimal procurement strategies for online spot markets. Eur J Oper Res 152(3):781–799

    Article  Google Scholar 

  27. Sepehri M (2012) A grid-based collaborative supply chain with multi-product multi-period production-distribution. Enterp Inf Syst 6(1):115–137

    Article  Google Scholar 

  28. Shan S, Mao Z, Wang L, Zhou R, Liu Z (2013) Streaming media advertising: an empirical study. Syst Res Behav Sci 30(3):398–411

    Article  Google Scholar 

  29. Shen H, Xu J, Pang Z (2004) Decision analysis for order- specific component procurement with loss-averse utility. J Manage Sci 7(6):37–45 (in Chinese)

    Google Scholar 

  30. Tan W, Xu W, Yang F, Xu L, Jiang C (2013) A framework for service enterprise workflow simulation with multi-agents cooperation. Enterp Inf Syst 7(4):523–542

    Article  Google Scholar 

  31. Tang C, Tomlin B (2008) The power of flexibility for mitigating supply chain risks. Int J Prod Econ 116(1):12–27

    Article  Google Scholar 

  32. Viriyasitavat W, Xu L, Martin A (2012) SWSpec: the requirements specification language in service workflow environment. IEEE Trans Ind Inf 8(3):631–638

    Article  Google Scholar 

  33. Wang C, Webster S (2007) Channel coordination for a supply chain with a risk-neutral manufacturer and a loss-averse retailer. Decis Sci 38(3):361–389

    Article  Google Scholar 

  34. Wang S, Li L, Wang K, Jones J (2012) e-business systems integration: a systems perspectives. Inf Technol Manage 13(4):233–249

    Article  Google Scholar 

  35. Wang S, Zheng S, Xu L, Li D, Meng H (2008) A literature review of electronic marketplace research: themes, theories and an integrative framework. Inf Syst Front 10(5):555–571

    Article  Google Scholar 

  36. Wu DJ, Kleindorfer P (2005) Competitive options, supply contracting and electronic markets. Manage Sci 51(3):452–466

    Article  Google Scholar 

  37. Xing Y, Li L, Bi Z, Wilamowska-Korsak M, Zhang L (2013) Operations research (OR) in service industries: a comprehensive review. Syst Res Behav Sci 30(3):300–353

    Article  Google Scholar 

  38. Xu L (2007) Editorial: inaugural issue. Enterp Inf Syst 1(1):1–2

    Article  Google Scholar 

  39. Xu L (2011) Enterprise systems: state-of-the-art and future trends. IEEE Trans Ind Inf 7(4):630–640

    Article  Google Scholar 

  40. Xu L (2011) Information architecture for supply chain quality management. Int J Prod Res 49(1):183–198

    Article  Google Scholar 

  41. Xu L, Viriyasitavat W, Ruchikachorn P, Martin A (2012) Using propositional logic for requirements verification of service workflow. IEEE Trans Ind Inf 8(3):639–646

    Article  Google Scholar 

  42. Xu S, Xu L, Basl J (2012) Introduction: advances in e-business engineering. Inf Technol Manage 13(4):201–204

    Article  Google Scholar 

  43. Yan R, Pei Z (2009) Retail services and firm profit in a dual-channel market. J Retail Consumer Serv 16(4):306–314

    Article  Google Scholar 

  44. Yao D, Liu J (2005) Competitive pricing of mixed retail and e-tail distribution channels. Omega 33(3):235–247

    Article  Google Scholar 

  45. Yue X, Liu J (2006) Demand forecast sharing in a dual-channel supply chain. Eur J Oper Res 174(1):646–667

    Article  Google Scholar 

  46. Zhang S, Li Y, Wang C (2002) Pricing model of bilateral optional electricity forward contracts. Control Decis 17(6):890–893

    Google Scholar 

  47. Zhao Q, Xiong Z, Lin Y, Bu X (2004) Game analysis of two-stage supply chain for perishable goods under e-marketplace. Chin J Manage Sci 3:91–96

    Google Scholar 

  48. Zhou H, Shou Y, Zhai X, Li L, Wood C, Wu X (2014) Supply chain practice and information quality: a supply chain strategy study. Int J Prod Econ 147:624–633

    Article  Google Scholar 

  49. Zsidisin G (2001) Measuring supply risk: an example from Europe. Best Pract Purch Supply Chain Manage 4(3):1–6

    Google Scholar 

  50. Zsidisin G (2003) A grounded definition of supply risk. J Purch Supply Manage 9(5/6):217–224

    Article  Google Scholar 

  51. Zsidisin G, Ellram L, Carter J, Cavinato J (2004) An analysis of supply risk assessment techniques. Int J Phys Distrib Logist Manage 34(5):397–413

    Article  Google Scholar 

Download references

Acknowledgments

Funding for this research is supported by the National Science Foundation of China (Grant Nos. 71271013, 70971004, 70971005, 71301152 and 71301011), key project of National Natural Science Foundation of China (No. 91224007),the National Social Science Foundation of China (Grant No. 11AZD096), the National Key Technology R&D Program of the Ministry of Science and Technology (Grants Nos. 2013BAK04B02, 2006BAK04A23), Quality Inspection Project (Grant No. 201010268), CSC Project (Grants No. 2011307460), Science and technology project of Beijing (Grant No. Z121100000312018), China Postdoctoral Science Foundation under Grants Nos. 2012M520008 and 2013T60091.

Author information

Authors and Affiliations

  1. China National Institute of Standardization, Beijing, 100191, China

    Yuexiang Yang & Yingcheng Xu

  2. School of Economics and Management, Beihang University, Beijing, 100191, China

    Li Wang & Yiyang Wang

  3. Department of Engineering, Indiana University Purdue University Fort Wayne, Fort Wayne, IN, 46805, USA

    Zhuming Bi

  4. Beijing Research Center for Information Technology in Agriculture, Beijing Academy of Agriculture and Forestry Sciences, Beijing, 100097, China

    Shouhui Pan

Authors
  1. Yuexiang Yang
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Li Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Yiyang Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Zhuming Bi
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. Yingcheng Xu
    View author publications

    You can also search for this author in PubMed Google Scholar

  6. Shouhui Pan
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Li Wang.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Yang, Y., Wang, L., Wang, Y. et al. Modeling and optimization of two-stage procurement in dual-channel supply chain. Inf Technol Manag 15, 109–118 (2014). https://doi.org/10.1007/s10799-014-0176-2

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10799-014-0176-2

Keywords

Search

Navigation