Cooperative Planning by Coordinating the Supply Channel

Cooperation between manufacturing enterprises has recently become widespread in order to cope with newly emerged challenges, such as growing customer expectations, increasing product variety and decreasing product lifecycles. Nowadays the response to these challenges seems to be the formation of tight relations in supply chains and networks, which enables joint handling of market risks and involves sharing benefits and mutual growth. Our current work studies this situation in case of high manufacturing setup costs, which inspire enterprises to produce in large sized lots, which could in turn, lead to obsolete inventories on unstable markets. We propose a method for coordinating supply channels on such markets and a framework for cooperative planning.