| Increasing pressures from customers for prompt deliveries and greater product variety at lower prices has impacted all entities of the supply chain---the network of organizations from raw material suppliers to manufacturers and distributors of finished goods. In response, manufacturing firms are moving towards collaborative fulfillment, partnering closely with other firms both upstream and downstream in the supply chain to meet market needs. As these strategic alliances grow, firms have come to recognize the importance of proper negotiation to establish the terms of collaboration and interaction with partners, and of effective coordination of activities and decisions, in lowering costs and in improving service. This dissertation develops mathematical decision models to support decision requirements such as, partner selection, activity coordination and partner compensation, that arise in the context of such partnerships. To illustrate each of these decision requirements, the thesis identifies three problems that cover all three stages---source, make and deliver---of the supply chain, featuring inter-functional relationships such as, between manufacturer and supplier, between sales and production planning, and between manufacturing and distribution. To support principled decisions in these contexts, we present an optimization-based model for each decision problem that accounts for the interdependencies of the business functions, while systematically evaluating complicated tradeoffs, for instance, between cost and service. The first model considers supplier selection in large multi-division firms and illustrates the benefits of central coordination of purchases across divisions to exploit supplier discount schedules. Next, we consider coordination of activities and decisions across the sales and production functions of a manufacturing firm that seeks to make responsive and realistic delivery date commitments to its customers. Finally, we consider the problem of compensation design in logistics partnerships between manufacturers and third party distributors. All the models identify new decision problems in collaborative supply chains and provide novel solution approaches to solve these decision problems effectively. |
