Discrete Choice-based Equilibrium Modeling of Supply Chain Network with Conflicting Objectives and Demand Uncertainty [article]

Jun Ma, University Of Calgary, Yiliu Tu
This PhD thesis discusses several equilibrium problems in supply chain network integration and specifically concentrates on the importance of collaboration under conflicting objective decision-making and uncertainty management in a supply chain network. In particular, discrete choice models are introduced into supply chain equilibrium models to bridge the conflicting objective decision-making in supply chains and customer preference. Furthermore, numerical examples are provided for model
more » ... ation, managerial insights, and algorithm performance. Finally, it attempts to explore the tradeoffs between the operation costs, service level, and time issues in a supply chain, considering customer preference and demand uncertainty. Two conventional assumptions used in both the supply chain network equilibrium model and the newsvendor model are generalized and relaxed in order to obtain more general solutions and methods. First, this PhD thesis adopts Sheffi's equilibrium condition assumption rather than Wardrop's network equilibrium condition assumption. Discrete choice models are introduced into supply chain equilibrium models. A probabilistic fashion is used to describe customer choice behavior, because all factors affecting customer choice behavior cannot be observed completely. It assumes equilibrium will be reached when no customer believes that his utility can be improved by unilaterally changing products (or services) provided by supply chains. This assumption is not easy to use in practice, except it can be characterized and formulated as equilibrium conditions mathematically. Next, the equilibrium conditions are formulated as multinomial logit- and newsvendor model-based variational inequalities. Second, the assumption in the newsvendor model that unmet demand is lost implies that customers are stockout neutral. This study assumes the customers are stockout aversion. This work generalizes the implied assumption in the newsvendor model and introduces it into the supply chain equilibrium model. This PhD thesis h [...]
doi:10.11575/prism/38546 fatcat:n7c3qyzyjnfmjjk74z2n7amqhe