Abstract: With the rapid development of make-to-order (MTO) supply chain, customers are becoming more and more sensitive to the service level, e.g., the delivery lead-time and delivery efficiency. A short delivery stimulates the market demand and vice versa. In order to maintain competitive advantage in the customized market, the retailer needs to shorten the delivery time while ensuring the efficiency of on-time delivery. However, there exist inherent uncertainties such as machine failure, a shortage of raw materials and unskilled work crew in the production process. The MTO manufacturer often fails to satisfy the required delivery time. Unfortunately, the retailer must pay tardiness penalty if the actual delivery time exceeds the promised delivery time. In order to improve on-time delivery rate under a short delivery time, the retailer often requires the manufacturer to hedge against its production uncertainty, which is defined as production lead-time hedging in this research. Although the production lead-time hedging strategy may improve the retailer's profitability by mitigating tardiness delivery, the manufacturer must spend more on the hedging, e.g., hiring more workers, leasing more production lines, and requiring workers to work overtime. Hence, the manufacturer will withdraw from the production lead-time hedging strategy if its profit is worse off. To solve the conflict between the retailer and manufacturer, we propose a side payment contract under which the retailer makes a direct money transfer to the manufacturer for compensating its hedging effort. This work is devoted to exploring the effect of production lead-time hedging on the delivery time decision, on-time delivery probability, and profits of each party while examining the effect of the proposed side payment contract on coordinating the decentralized supply chain.
We consider three scenarios corresponding to different power settings, namely, the centralized model, the Nash game model and retailer-led Stackelberg game model. Under the centralized model, the decisions are made by a super manager who aims at maximizing the profit of entire supply chain. Under the Nash game model, the retailer decides the delivery time while the manufacturer decides the production lead-time hedging amount simultaneously. Under the retailer-led Stackelberg game model, the retailer who acts as the game leader chooses the delivery time at the first stage. Given the delivery time, the manufacturer chooses the production lead-time decision at the second stage. By analyzing the game equilibrium, we derive the optimal decision for each participant.
Through numerical analysis and model comparison, we find that the production lead-time hedging strategy improves the channel profit as well as promote the market demand. The win-win outcome is reached through the proposed side payment contract. The major findings and managerial implications are summarized as below:
First, adopting production lead-time hedging strategy facilitates the retailer to choose a shorter delivery time. Especially, under the centralized model, the delivery time reaches its shortest while the production lead-time hedging amount reaches its highest. The production lead-time hedging strategy protects both retailer's and manufacturer's profits even when the consumer's delivery time sensitivity or the tardiness penalty becomes higher. The relationship between different game models depends on the tardiness penalty sharing rate, production lead-time hedging cost and unit tardiness penalty.
Second, the retailer should actively provide side payment contract to encourage the manufacturer to take part in the production lead-time hedging strategy. Although the retailer should pay extra cost for hedging, his profit is compensated by the reduced tardiness penalty and increased sales. Under the decentralized supply chain, each party's profit under the retailer-led Stackelberg game is higher than that under the Nash game. Hence, we suggest the manufacturer should not blindly pursue an equal power structurer, for the retailer-led Stackelberg game is the dominant strategy for both parties.
Third, in the light of the equilibrium decisions, we suggest both the retailer and manufacturer should consider the tardiness penalty, retail price, consumer delivery time sensitivity, consumer price sensitivity and initial market size while optimizing their operation decisions. From the retailer's perspective, raising retail price while selling products to market with low sensitivity towards price/delivery time, or low tardiness penalty brings more profits. From the manufacturer's perspective, selling products to market with low or moderate delivery time sensitivity and retail price increases its profitability.

Key words: make-to-order (MTO), delivery lead-time, lead-time hedging, coordination mechanism

摘要： 随着定制化供应链的普及,顾客对于定制化产品的交付期以及准时交付率变得日益敏感。为了在定制化市场中保持竞争优势,零售商需要在缩短交付期的同时确保按时交付的准时率,因而希望制造商通过压缩生产时间来缓解因生产环节不确定性而造成的延期惩罚。这种压缩生产时间的策略称为生产时间对冲策略。虽然该策略可以提升零售商的利润,却要求制造商进行额外成本投入。为解决零售商与制造商的决策冲突问题,本文提出基于承诺交付期及生产时间对冲补偿成本的合作机制。针对不同的市场权利结构分别建立了集中决策模型,Nash博弈模型以及零售商主导的Stackelberg博弈模型。结果表明:生产时间对冲策略有效提升了供应链整体利润并增加了市场需求,并且,通过引入生产时间对冲成本补偿,实现了零售商与制造商的共赢. 当需求对承诺交付期较敏感时,零售商的承诺交付期减少而制造商的生产时间对冲值增加,反之亦然。

关键词: 按订单生产, 交付期, 时间对冲, 协调机制