Ordering and pricing policies in a manufacturing and distribution supply chain for fashion products

Scott Webster, Z. Kevin Weng

Research output: Contribution to journalArticle

41 Citations (Scopus)

Abstract

In the paper, we develop a model of manufacturing and distribution supply chains that are operating to meet price-sensitive random demand for products with short life cycles such as fashion products. Two specific scenarios are considered. The manufacturer-controlled scenario is one where the distributor shares price-sensitive random demand with the manufacturer, and the manufacturer controls the supply chain stocking decisions and bears the risk of overstocking costs. The distributor-controlled scenario works in the opposite direction. Prevailing wisdom suggests that the manufacturer should control supply chain decisions (e.g., via vendor-managed inventory). Our results indicate that such an arrangement is against the interest of a distributor selling short life-cycle products. Furthermore, we find that the total supply chain profit is generally higher when the distributor controls the supply chain stocking decisions and bears the risk of overstocking costs.

Original languageEnglish (US)
Pages (from-to)476-486
Number of pages11
JournalInternational Journal of Production Economics
Volume114
Issue number2
DOIs
StatePublished - Aug 2008
Externally publishedYes

Fingerprint

Supply chains
Costs
Life cycle
Profitability
Sales
Ordering policy
Distributor
Pricing policy
Manufacturing
Supply chain
Scenarios
Random demand

Keywords

  • Fashion products
  • Short life-cycle product
  • Supply chain

ASJC Scopus subject areas

  • Economics and Econometrics
  • Industrial and Manufacturing Engineering

Cite this

Ordering and pricing policies in a manufacturing and distribution supply chain for fashion products. / Webster, Scott; Kevin Weng, Z.

In: International Journal of Production Economics, Vol. 114, No. 2, 08.2008, p. 476-486.

Research output: Contribution to journalArticle

@article{f8554e0652784f8eadd8f49c6df1465c,
title = "Ordering and pricing policies in a manufacturing and distribution supply chain for fashion products",
abstract = "In the paper, we develop a model of manufacturing and distribution supply chains that are operating to meet price-sensitive random demand for products with short life cycles such as fashion products. Two specific scenarios are considered. The manufacturer-controlled scenario is one where the distributor shares price-sensitive random demand with the manufacturer, and the manufacturer controls the supply chain stocking decisions and bears the risk of overstocking costs. The distributor-controlled scenario works in the opposite direction. Prevailing wisdom suggests that the manufacturer should control supply chain decisions (e.g., via vendor-managed inventory). Our results indicate that such an arrangement is against the interest of a distributor selling short life-cycle products. Furthermore, we find that the total supply chain profit is generally higher when the distributor controls the supply chain stocking decisions and bears the risk of overstocking costs.",
keywords = "Fashion products, Short life-cycle product, Supply chain",
author = "Scott Webster and {Kevin Weng}, Z.",
year = "2008",
month = "8",
doi = "10.1016/j.ijpe.2007.06.010",
language = "English (US)",
volume = "114",
pages = "476--486",
journal = "International Journal of Production Economics",
issn = "0925-5273",
publisher = "Elsevier",
number = "2",

}

TY - JOUR

T1 - Ordering and pricing policies in a manufacturing and distribution supply chain for fashion products

AU - Webster, Scott

AU - Kevin Weng, Z.

PY - 2008/8

Y1 - 2008/8

N2 - In the paper, we develop a model of manufacturing and distribution supply chains that are operating to meet price-sensitive random demand for products with short life cycles such as fashion products. Two specific scenarios are considered. The manufacturer-controlled scenario is one where the distributor shares price-sensitive random demand with the manufacturer, and the manufacturer controls the supply chain stocking decisions and bears the risk of overstocking costs. The distributor-controlled scenario works in the opposite direction. Prevailing wisdom suggests that the manufacturer should control supply chain decisions (e.g., via vendor-managed inventory). Our results indicate that such an arrangement is against the interest of a distributor selling short life-cycle products. Furthermore, we find that the total supply chain profit is generally higher when the distributor controls the supply chain stocking decisions and bears the risk of overstocking costs.

AB - In the paper, we develop a model of manufacturing and distribution supply chains that are operating to meet price-sensitive random demand for products with short life cycles such as fashion products. Two specific scenarios are considered. The manufacturer-controlled scenario is one where the distributor shares price-sensitive random demand with the manufacturer, and the manufacturer controls the supply chain stocking decisions and bears the risk of overstocking costs. The distributor-controlled scenario works in the opposite direction. Prevailing wisdom suggests that the manufacturer should control supply chain decisions (e.g., via vendor-managed inventory). Our results indicate that such an arrangement is against the interest of a distributor selling short life-cycle products. Furthermore, we find that the total supply chain profit is generally higher when the distributor controls the supply chain stocking decisions and bears the risk of overstocking costs.

KW - Fashion products

KW - Short life-cycle product

KW - Supply chain

UR - http://www.scopus.com/inward/record.url?scp=46849089718&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=46849089718&partnerID=8YFLogxK

U2 - 10.1016/j.ijpe.2007.06.010

DO - 10.1016/j.ijpe.2007.06.010

M3 - Article

AN - SCOPUS:46849089718

VL - 114

SP - 476

EP - 486

JO - International Journal of Production Economics

JF - International Journal of Production Economics

SN - 0925-5273

IS - 2

ER -