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Discrete Dynamics in Nature and Society
Volume 2014 (2014), Article ID 625812, 10 pages
http://dx.doi.org/10.1155/2014/625812
Research Article

Collaborative Policy of the Supply-Hub for Assemble-to-Order Systems with Delivery Uncertainty

1School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China
2School of Business Administration, Hunan University, Changsha 410082, China
3Economics and Management School, Wuhan University, Wuhan 430072, China
4School of Management, Huazhong University of Science and Technology, Wuhan 430074, China

Received 26 July 2013; Revised 6 March 2014; Accepted 13 March 2014; Published 29 May 2014

Academic Editor: Tinggui Chen

Copyright © 2014 Guo Li et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper considers the collaborative mechanisms of the Supply-Hub in the Assemble-to-Order system (ATO system hereafter) with upstream delivery uncertainty. We first propose a collaborative replenishment mechanism in the ATO system, and construct a replenishment model with delivery uncertainty in use of the Supply-Hub. After transforming the original model into a one-dimensional optimization problem, we derive the optimal assembly quantity and reorder point of each component. In order to enable the Supply-Hub to conduct collaborative replenishment with each supplier, the punishment and reward mechanisms are proposed. The numerical analysis illustrates that service level of the Supply-Hub is an increasing function of both punishment and reward factors. Therefore, by adjusting the two factors, suppliers’ incentives of collaborative replenishment can be significantly enhanced, and then the service level of whole ATO system can be improved.