Determining Optimal Level of Product Availability Optimal Matching of Supply and Demand (III) 【本著作除另有註明外，採取創用 CC 「姓名標示 －非商業性－相同方式分享」台灣 3.0 版授權釋出】創用 CC 「姓名標示 －非商業性－相同方式分享」台灣 3.0 版 第十單元 (2) ： Determining Optimal Level of Product Availability 1 蔣明晃教授

Revenue Sharing Contracts ►Manufacture charges the retailer a low wholesale price and shares a fraction of the revenue generated by the retailer. ►The retailer cost will be decreased due to lower overstock cost, thus, retailer will increase the level of product availability resulting higher profits for both manufacturer and retailer. Basher Eyre _Geograph 2

Revenue Sharing Contracts ►M►Manufacturer’s production cost = v ►W►Wholesale price charged by manufacturer = c ►M►Manufacturer shares a fraction f of the retailer’s revenue ►R►Retailer charges a retail price p and has a salvage value s R for unsold items. ►T►The understocking cost = C u = (1-f)p – c ►T►The overstocking cost = C o = c – s R 3

4

►Example: TF charges only c = $10 for each jacket, SA sells the jacket for p = $200 and shares f of the revenue to TF. Demand at this price is normal distributed with a mean 1000 and a standard deviation 300. Assume that no salvage value for any leftover jackets. 5

Revenue Sharing Contracts Wholesale Price c Revenue- Sharing Fraction f Optimal Order Size for SA Expected Overstock At SA Expected Profit for SA Expected Profit for TF Expected Supply Chain Profit $

Revenue Sharing Contracts ►Observations: revenue sharing with a lower wholesale price allows both retailers and manufactures to increase their profit. The revenue sharing encourages retailers to increase the level of product availability ►Applications: video rental industry, such as Blockbuster. 7

Contracts for Product Availability and Supply Chain Profits: Revenue Sharing Contracts ►The buyer pays a minimal amount for each unit purchased from the supplier but shares a fraction of the revenue for each unit sold ►Decreases the cost per unit charged to the retailer, which effectively decreases the cost of overstocking ►Have a similar effect as buyback contracts but eliminate the cost of returns ►Enabler: require an information infrastructure to monitor sales at retailer 》 Lower retailer effort 》 Suited for products with low variable cost and a high cost of return 》 Result in supply chain information distortion 8

Quantity Flexibility Contracts ►If a retailer order O units the manufacturer commits to supplying up to Q = (1+  )O and the retailer commits to buying q = (1-  )O ►How can quantity flexibility contracts help increase profitability? Wikipedia 9

Quantity Flexibility Contracts ►M►Manufacturing cost per unit: v ►W►Wholesale price: c ►R►Retailing price: p ►R►Retailer salvage value: S R ►M►Manufacture salvage value: S M ►D►Demand  (  2) 10

Quantity Flexibility Contracts ►S►Scenario: 》R》R etailer orders O units, manufacture commits to supply Q units 》M》M anufacturer produces Q units 》R》R etailer purchases q units if demand R is less than q; R units of demand R is between q and Q; Q units if demand is higher than Q 11

Quantity Flexibility Contracts 5E5Expected quantity sold by retailer 5E5Expected quantity purchased by retailer q = (1-  )OQ = (1+  )O 12

Quantity Flexibility Contracts 5E5Expected overstock at retailer 5E5Expected retailer profit 5E5Expected manufacture profit 13

Quantity Flexibility Contracts  Wholesal e price c Order size O Expected purchase by SA Expected sale by SA Expected profits for SA Expected profits for TF Expected supply chain profit 0.00 $1001, $76,063$90,000$166, $1001,0501,024968$91,167$89,830$180, $1001,0701,011994$97,689$86,122$183, $ $66,252$96,200$162, $1101,0141,009945$78,153$99,282$177, $1101,0481,007993$87,932$95,879$183, $ $56,819 $101,640 $158, $1201, $70,933 $108,000 $178, $1201,0401,003996$78,874 $104,803 $183,677 14

Quantity Flexibility Contract ►C►Common for components in the electronic and computer industry ►E►Example: 》B》B enetton: retailer required to place order 7 months before delivery, but allow retailer to alter up to 30% quantity ordered in any color and assign to another color 3 months before delivery and allow retailer to alter up to 10% after the start of the season 15

Contracts for Product Availability and Supply Chain Profits: Quantity Flexibility Contracts ►Allows the buyer to modify the order (within limits) as demand visibility increases closer to the point of sale ►Better matching of supply and demand ►Increased overall supply chain profits if the supplier has flexible capacity ►Can be effective if a supplier sells to multiple retailers with independent demand 16

Contracts for Product Availability and Supply Chain Profits: Quantity Flexibility Contracts ►Downsize: 》 Supplier needs to have inventory or excess flexible capacity 》 Lower levels of information distortion than either buyback contracts or revenue sharing contracts due to aggregation of uncertainty from supplier 》 Lower retailer effort 17

Vendor-Managed Inventory(VMI) ►V►V MI: manufacturer or supplier is responsible for all decisions regarding product inventories at the retailer ►R►R equirements: share info from retailers ►B►B enefits: 》I》I ncrease profit of manufacturer 》I》I mprove manufacturer forecast accuracy 》A》A void double marginalization ►D►D rawbacks: 》I》I mpact of product substitution to bring higher inventory in retailer 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約及著作權法 第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約及著作權法 第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約及著作權法 第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約及著作權法 第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 18

CR CP CF CPFR Model 1. 協同合作協議 2. 協同商業計劃 3. 共同的銷售預測 4. 例外狀況的判定與 處理 5. 共同的訂單預測 6. 例外狀況的判定與 處理 7. 訂單產生 Collaborative Planning, Forecasting, and Replenishment 本作品轉載自 Collaborative Planning, Forecasting and Replenishment ，瀏覽日期 2012/03/23 。依據 著作權法第 46 、 52 、 65 條合理使用。Collaborative Planning, Forecasting and Replenishment 19

CPFR ► 避免不必要庫存 – 庫存成本 – 報廢 – 外部庫存 ► 提升流程效率 ► 增加收益 ► 提高物流利用率 – 避免缺貨 – 提高促銷效率 – 提升業績 – 訂單管理 – 採購 – 人力管理 – 提高配送效率 – 整合運輸管理 導入 CPFR 的好處 20

協同規劃，預測與補貨 (Collaborative Planning, Forecasting, and Replenishment, CPFR) ►目►目標： 》對》對共同作業過程，格式與績效指標的協調一致 》透》透過 POS 資料，分享一個共同預測與需求規劃 》在》在一個協調機制下，對需求滿足，滿足的優先次序 與供應分配的管理之相互溝通 》對》對未來促銷的預先通知以減少長鞭效應 》透》透過共同技術的分享，使需求，存貨與運送的資料 更透明化 21

協同規劃，預測與補貨 (CPFR) ►指►指導原則： 》共》共同交易架構的建立：語言，作業模式， 與資料標準 》企》企業的流程必須清楚定義 》作》作業的流程與共同的術語必須轉換成特定 與共同的標準 22

CPFR Roadmap ►Published by VICS (Interindustry Commerce Standard Association) ►Nine steps: 》 Develop guidelines for the relationships 》 Develop a joint business plan 》 Create a sales forecast 》 Identify exceptions for the sales forecast 》 Collaborate on exception items 》 Create an order forecast 》 Identify exceptions for the order forecast 》 Resolve/collaborate on exception items 》 Generate orders 23

協同規劃，預測與補貨 (CPFR) ►績►績效指標： 》預》預測準確度的提升 》顧》顧客服務水準的提高 》缺》缺貨率的降低 》存》存貨水準的降低 》較》較佳的財務資金結構 24

Contracts to Coordinate Supply Chain Costs ►Differences in costs at the buyer and supplier can lead to decisions that increase total supply chain costs ►A quantity discount contract may encourage the buyer to purchase a larger quantity (which would be lower costs for the supplier), which would result in lower total supply chain costs but higher inventory levels and lot sizes ►Quantity discounts lead to information distortion because of order batching 》 Example: Replenishment order size placed by the buyer. The buyer’s EOQ does not take into account the supplier’s costs. 25

Contracts to Increase Agent Effort ►There are many instances in a supply chain where an agent acts on the behalf of a principal and the agent’s actions affect the reward for the principal ►Threshold contracts increase information distortion, however. One way to offer threshold incentives over a rolling horizon. 》 Example: A car dealer who sells the cars of a manufacturer, as well as those of other manufacturers 》 Examples of contracts to increase agent effort include two-part tariffs (a franchise fee and sell product at cost) and threshold contracts (increasing margin to dealer for higher threshold) 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約及著作權法第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 26

Contracts to Induce Performance Improvement ►A buyer may want performance improvement from a supplier who otherwise would have little incentive to do so ►A shared savings contract provides the supplier with a fraction of the savings that result from the performance improvement such as lead time, quality ►Particularly effective where the benefit from improvement accrues primarily to the buyer, but where the effort for the improvement comes primarily from the supplier 27

頁碼作品授權條件作者 / 來源 2 Geograph ，作者： Basher Eyre 。 ( ，瀏覽日期： 2012/02/24 。 該網站採取創用 CC 「姓名標示－相同方式分享」 2.0 版授權釋出。 CC 「姓名標示－相同方式分享」 2.0 版 9 本作品轉載自 WIKIPEDIA ( ，瀏覽日期 2012/03/02 。 18 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約 及著作權法第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 18 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約 及著作權法第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 18 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約 及著作權法第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 18 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約 及著作權法第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 19 本作品轉載自 ( 頁 11) ，瀏覽日期 2012/03/23 。依據著作權法第 46 、 52 、 65 條合理使用。 版權聲明 28

頁碼作品授權條件作者 / 來源 26 本作品轉載自 Microsoft Office 2007 多媒體藝廊，依據 Microsoft 服務合約 及著作權法第 46 、 52 、 65 條合理使用。 Microsoft 服務合約 版權聲明 29