A Pareto Analysis of Order Timing Based on Supplier‘s Service Level

Abstract

Abstract: There is little research report on order timing from the perspective of service level. In this paper, such a problem is studied for a supply chain system composed of a single supplier and a single retailer. Based on the newsboy model, a mathematical model is developed for the problem. With the model, the impact of service level on both sides preference in order timing is analyzed. Based on game theory, for different suppliers service level, corresponding Pareto optimal areas can be found. Results show that, when the suppliers service level is low, advance order is beneficial to the retailer, otherwise delayed order is favorable for the supplier. Also, it shows that, normally, a supplier prefers retailers advance order, which is consistent with the reality.

Key words: delayed order, order timing, supply chain, service level

Xiong Hengqing1,2, Gao Dandan2, Guan Xu2. A Pareto Analysis of Order Timing Based on Supplier‘s Service Level[J]. Industrial Engineering Journal , 2012, 15(3): 41-45.

References

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