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The value of enhancing customisation in the existence of consumer preferences heterogeneity

Research output: Contribution to book/anthology/report/proceedingArticle in proceedingsResearchpeer-review

  • Hartanto Wong
  • Dharma Lesmono, Parahyangan Catholic University, Indonesia
An integrated vendor-buyer model for a two-stage supply chain is developed and analyzed. The vendor manufactures the product at a finite rate and delivers it in a number of equal-sized batches to the buyer. The items delivered are presented to the end customers in a display area and/or are kept in the buyer's warehouse. The demand is assumed to be positively dependent on the amount of items shown in the display area. The proposed model determines the buyer's optimal shipment quantity and number of shipments, as well as the vendor's optimal production batch. The objective is to maximize total supply-chain profit. The numerical analysis shows that as long as the maximum display area is not used, it is more valuable for the buyer and the vendor to cooperate in situations when the demand is more stock- dependent. It also shows the effect of double marginalization in this integrated vendor-buyer model.
Original languageEnglish
Title of host publicationProceedings of the 21st International Conference on Production research
EditorsDieter Spath, Rolf Ilg, Tobias Krause
PublisherFraunhofer Verlag
Publication year2011
ISBN (Electronic)978-3-8396-0293-5
Publication statusPublished - 2011
Event21st International Conference on Production Research - Stuttgart, Germany
Duration: 31 Jul 20114 Aug 2011


Conference21st International Conference on Production Research

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