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Title: Setting operating policies for supply hubs
Authors: Shah, J.
Goh, M. 
Keywords: Logistics
Supply chain management
Supply hub
Issue Date: 2006
Citation: Shah, J., Goh, M. (2006). Setting operating policies for supply hubs. International Journal of Production Economics 100 (2) : 239-252. ScholarBank@NUS Repository.
Abstract: This paper deals with the joint management of operations at the supply hub for the customer and the upstream supplier. Different operating conditions are considered, namely, backordering, minimum and maximum specified inventory levels. Some analytical insights on better managing suppliers operating under a vendor managed inventory program are presented. Essentially, we show that the penalty cost imposed on over- and under-stocking, and the min-max policy for hub inventory reside in the power of the hub operator. The relationship between supply hub policy and performance measures is quite complex and non-linear in nature. We suggest a structured hierarchical approach which can help supply hub in achieving balance between various parties involved in chain. A numerical example and an algorithm are included to highlight this result. © 2004 Elsevier B.V. All rights reserved.
Source Title: International Journal of Production Economics
ISSN: 09255273
DOI: 10.1016/j.ijpe.2004.11.008
Appears in Collections:Staff Publications

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