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Abstract

In this paper, we analyse the inventory and ordering policies of two firms, when (i) each firm has its own supplier and market but, (ii), the first firm may act as a second supplier of the second one. This allows us to study the interest of improving horizontal coordination between producers in order to minimize shortages or overstocking phenomena due to demand hazards : such producer-to-producer relationships are indeed more and more developed in numerous agro-food chains (like fruit chains). We develop a general newsvendor-like formulation of the optimal procurement and inventory policies, and calculate chain profits according to various levels of coordination between the two firms. An application to the case of a uniform demand is analysed more precisely. We then use a numerical analysis to define the conditions under which a high level of coordination may be interesting for both firms and the whole chain.

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