In this thesis, two systems are analyzed in order to gain insight to the following
issues: (i) Effect of incentive, subsidy and penalty designs on decentralized system,
(ii) effect of using production facility as pooled capacity (pooled system) and
dedicated capacity (unpooled system) on capacity utilization and system profit.
Regarding the first issue, three models are defined / decentralized model, centralized
model and decentralized model with incentive, subsidy, penalty designs. In all
models, there are two dealers and one item is under consideration and lateral
transshipments are allowed. Dealers operate with four inventory level decision
(strategies) that consists of base stock level, rationing level, transshipment request
level and customer rejection level. Under the decentralized system, a dealer sets its
operating strategy according to the strategy of the other dealer and maximizes its
own infinite horizon discounted expected profit. In the centralized system, a central
authority (say manufacturer) exists, which considers the system-wide infinite
horizon discounted expected profit, and makes all decisions. Under decentralized
system with incentive, subsidy, penalty designs, manufacturer tries different designs
on decentralized system namely revenue sharing, holding cost subsidy, request
rejection penalty, transportation cost subsidy and commission subsidy in order to
v
align decentralized system with centralized system. According to the results
obtained, this alignment works best with nearly 40% revenue sharing percentage,
low rejection penalty, high transportation cost subsidy under low transportation cost
and commission subsidy under very low or very high commissions. Holding cost
subsidy, on the other hand, is not a good strategy since it declines decentralized
system profit. Considering the second issue, two systems are examined / pooled
system and unpooled system. Both systems are centrally managed. In the pooled
system, all capacity is dynamically allocated to either dealer considering
maximization of system profit. In the unpooled system, capacity is shared among
dealers and dealers are always allocated same percentage of the capacity. Infinite
horizon average expected profit is maximized in both systems. The dealer having
lower holding cost is allocated higher capacity in both pooled and unpooled system / however, exceptions exist in the unpooled system under low arrival rate. Highrevenue
dealer is always allocated higher capacity in both pooled and unpooled
system. Arrival rate affects both systems such that total capacity utilization increases
with increasing arrival rate. From the profit point of view, pooled system has great
advantage under low demand rate in general.
| Identifer | oai:union.ndltd.org:METU/oai:etd.lib.metu.edu.tr:http://etd.lib.metu.edu.tr/upload/12613408/index.pdf |
| Date | 01 July 2011 |
| Creators | Atak, Erman |
| Contributors | Tufekci, Secil Savasaneril |
| Publisher | METU |
| Source Sets | Middle East Technical Univ. |
| Language | English |
| Detected Language | English |
| Type | M.S. Thesis |
| Format | text/pdf |
| Rights | To liberate the content for public access |
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