Supply Chain Management: Coordination of Operations Planning: Decentralized Approaches

Supply chains are complex systems, which include several independent organizations with different objectives, in dynamic uncertain environment. A key issue in supply chain management (SCM) is the coordination of supply chain operations planning decisions. In this book, we first review supply chain operations planning coordination methods from centralized to decentralized approaches proposed in the literature. Second, we propose a decentralized operations planning coordination mechanism referred to as mutual adjustment search (MAS), which is based on a negotiation-like mutual adjustment of planning decisions with financial incentives and rooted in mathematical programming. Finally, in order to develop an approach capable of supporting the dynamic coordination of operations planning in a rolling horizon context, this book first proposes a negotiation strategy for the supplier, as well as a revenue sharing protocol. Computational analysis shows that the proposed approach produces a win-win strategy for two partners of supply chain and improves the results of upstream planning.