Sustainable collaboration in supply chains

The intertemporal supply chain models presented in Chapters 4 and 5 focus on inventory, production and pricing relationships between a supplier and a retailer according to different types of demands. However, in reality, there are many other factors that affect members of a supply chain. For example, uncertainty can be associated not only with demands but also with production yields. The firms may utilize common resources such as energy, raw materials, budget and logistics infrastructure, which can be limited or delivered by a supplier of bounded capacity. Furthermore, the firms may choose to expand their outsourcing activities to include repair and maintenance operations rather than just production or inventory.

In this chapter we extend our attention to broader issues and consider supply chains in which the parties collaborate to gain centralized control over decision-making. We are thus interested in reexamining system-wide optimal production and inventory policies to account for additional constraints and conditions imposed on supply chains. Special attention is paid here to production control of multiple manufacturers sharing limited supply chain resources.