TY - JOUR
T1 - Effects of Yield and Lead-Time Uncertainty on Retailer-Managed and Vendor-Managed Inventory Management
AU - Lee, Soonkyo
AU - Kim, Young Joo
AU - Cheong, Taesu
AU - Yoo, Seung Ho
N1 - Funding Information:
This work was supported in part by the Korea Institute for Advancement of Technology (KIAT) grant funded by the Korea Government (MOTIE) (The Competency Development Program for Industry Specialist) under Grant P0008691, and in part by the Research and Development Program of the Korea Railroad Research Institute.
Publisher Copyright:
© 2013 IEEE.
PY - 2019
Y1 - 2019
N2 - Generally, there are various elements of uncertainty in a supply chain. In particular, uncertainties in lead time, demand, and yield are very important in the semiconductor industry. Higher uncertainty can lead to bullwhip effects that can undermine the performance of the entire supply chain. This study examines the relationship between uncertainty in the supply chain and the outcome of inventory replenishment policies. Specifically, we analyze the effects of well-known uncertainties on manufacturer production quantity and retailer order quantity decisions in a decentralized supply chain. In addition, we also analyze and compare the effects of these uncertainties for the retailer-managed inventory and the vendor-managed inventory policies. Using numerical experiments, a comparative analysis of the two alternatives is conducted to determine suitable options for improving supply chain performance. In general, the performance of vendor-managed inventory is better than that of retailer-managed inventory, but we observe from the numerical experiments that there exist circumstances under which retailer-managed inventory shows better supply chain performance.
AB - Generally, there are various elements of uncertainty in a supply chain. In particular, uncertainties in lead time, demand, and yield are very important in the semiconductor industry. Higher uncertainty can lead to bullwhip effects that can undermine the performance of the entire supply chain. This study examines the relationship between uncertainty in the supply chain and the outcome of inventory replenishment policies. Specifically, we analyze the effects of well-known uncertainties on manufacturer production quantity and retailer order quantity decisions in a decentralized supply chain. In addition, we also analyze and compare the effects of these uncertainties for the retailer-managed inventory and the vendor-managed inventory policies. Using numerical experiments, a comparative analysis of the two alternatives is conducted to determine suitable options for improving supply chain performance. In general, the performance of vendor-managed inventory is better than that of retailer-managed inventory, but we observe from the numerical experiments that there exist circumstances under which retailer-managed inventory shows better supply chain performance.
KW - Yield
KW - decentralized supply chain
KW - lead-time
KW - optimal order quantity
KW - optimal production quantity
KW - retailer-managed inventory
KW - single-period inventory
KW - vendor-managed inventory
UR - http://www.scopus.com/inward/record.url?scp=85077003786&partnerID=8YFLogxK
U2 - 10.1109/ACCESS.2019.2957595
DO - 10.1109/ACCESS.2019.2957595
M3 - Article
AN - SCOPUS:85077003786
SN - 2169-3536
VL - 7
SP - 176051
EP - 176064
JO - IEEE Access
JF - IEEE Access
M1 - 8922591
ER -