Modeling of Credit Option Replenishment in Cluster Supply Chain Networks under Internet Environment

Abstract

Cluster Supply Chain (CSC) networks is a complex system combined industrial cluster and supply chains. It allows small-and-medium-sized enterprises (SMEs) to coordinate from firm wide to chain-wide, and even to chain-to-chain on trust or oral agreement rather than contract. However, decentralized and asymmetric information make SMEs in CSC replenishment ineffectively and inefficiently. Internet can pave a new way for these SMEs to replenishment well in CSC networks. The Internet not only provides platform to collect and share information from upstream vendors and downstream buyers, but also coordinate all participants to obtain the benefit of economic scale and cost saving. More importantly, this does not disrupt SMEs in CSC to adapt their unique way of trust or oral agreement. On basis of CSC networks, this paper explores the decentralized replenishment model of MVMB (multiple-vendor-multiple-buyer) based on the replenishment model of SVSB (single-vendor-single-buyer) in single chain, then extends to a MVMB joint replenishment model with credit option and the corresponding delayed payment by adjusting the production intervals and the order intervals. It is found that the joint replenishment model with credit option is more cost-effective than decentralized one for the whole CSC networks. It is also concluded that the saving cost in CSC system comes mainly from the vendors' reduction in safety stock by the replenishment coordination between the buyers and vendors and the freight cost discount. At last, the given profit-sharing scheme is employed through all the participants' bargaining power, and the Pareto optimality can be achieved in the CSC network.