Flexible Multi-Layered Dynamic Supply Chain Models with Cooperative Negotiation

Abstract

Supply chain management has been investigated for the configuring and controlling of material and information flows among different organizations. The trend has been toward even more flexible or dynamic supply chains to find suitable business partners and enter into profitable contracts. Previous studies have proposed a two-layered supply chain model consisting of two kinds of organization: clients and suppliers. This study proposes a new model representing multi-layered dynamic supply chains and a negotiation protocol in multi-layered organizations. The organizations in the middle-layers generate both orders of parts for suppliers and offers of products for clients. Production schedules in the middle-layers continue to be modified after orders are sent to suppliers. Suppliers simultaneously generate and modify sets of production schedules for individual orders to find the most profitable order of all. The effectiveness of the model and the negotiation protocol is evaluated through computational experiments.