Collaborative supply model and case simulation in a two-level assemble-to-order system in the context of global purchasing

Abstract

The lack of collaboration between overseas and local suppliers in global purchasing is a major challenge in assemble-to-order (ATO) supply chain management. This study established a collaborative supply chain model with a single manufacturer and multiple suppliers to explore the collaborative supply strategy in a time-price-sensitive ATO system. The method adopted the cost-benefit analysis with time constraints. The profit functions of the manufacturer and local suppliers were given in decentralized decision mode, and the Nash equilibrium solution of supply chain decision was obtained. The strategy combination of collaborative supply was then determined. Herman Miller (Ningbo), Inc. was taken as an example, and a numerical simulation was discussed to illustrate the proposed approach. Different scenarios of the delivery time of overseas suppliers and the time sensitivity coefficient of customers were considered. Results confirm that supply collaboration has a significant impact on the ATO supply chain performance in global purchasing. The collaborative supply strategy combination determined by model optimization can improve the expected profits of the manufacturer and local suppliers. The conclusion of this study can provide a theoretical basis and a decision-making reference for supply chain enterprises to develop effective global purchasing strategies in time-price-sensitive markets.