Paper Info
Title
Facing Market Disruptions: Values Of Elastic Logistics In Service Supply Chains
Abstract
Market disruptions are commonly seen nowadays which directly affect demand. However, in logistics service supply chains, service capacity suppliers and service providers usually have to prepare logistics-service-capacity before demand is known. In this paper, we explore a logistics service supply chain with which the logistics-service provider (LP) has to decide the quantity of capacity to reserve to satisfy future demand in the upcoming season, which depends on whether market disruption occurs or not. The optimal capacity planning policy is determined and the impacts brought by the chance of market disruption are uncovered. Then, we consider the scenario with 'elastic logistics' in which capacity can be adjusted after the market state is known. We analytically establish the corresponding optimal dynamic policy and prove that it helps to stop the ripple effect from appearing. We explore the value of elastic logistics and propose conditions and measures to achieve Pareto improvement in the supply chain upon the adoption of elastic logistics. We extend the analysis to the case with the risk-averse LP and uncover that our qualitative findings remain robust, irrespective of the LP's risk attitude.
Year
DOI
Venue
2021
10.1080/00207543.2020.1722861
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
Keywords
DocType
Volume
market disruptions, elastic logistics, ripple effect, service supply chain systems, service capacity, supply chain management, risk aversion
Journal
59
Issue
ISSN
Citations 
1
0020-7543
0
PageRank 
References 
Authors
0.34
0
1
Name
Order
Citations
PageRank
Tsan-Ming Choi1104075.03