Introducing a mathematical model in supply chain with adding trust flow

Document Type: Research Paper

Authors

1 Department of Industrial Engineering, Islamic Azad University, South Tehran Branch, Tehran, Iran

2 Department of Industrial Engineering, Iran University of Science and Technology

3 Industrial Engineering department, South branch of Azad University, Iran

Abstract

These day, supply chains (SCs) have become more and more complicated and have extensively expanded and due to these complexities, the supply chain management (SCM) has encountered several uncertainties, and, as a result, trust and assurance between members in SCs has become essential for a successful SCM. Although trust is an inevitable component in nearly all fields in SCs, like cooperation, coordination and management. As Trust increases the sense of security among members and cuts back on the losses, this research attempts to introduce a mathematical model that is able to utilize trust as a main element in a two-echelon SC. Defining trust is difficult since it is analyzed from different perspectives, and it is used in a wide range of situations. Therefore, the aim of this study is to propose an appropriate definition for this concept according to SCs, and to present a two-echelon SC, including a retailer and a supplier. The supplier and the retailer play Stackelberg game in newsvendor framework. The order quantity and stock, as the best sections for proposing the definition of trust, is developed for retailer and supplier. In addition, Beta model is presented for calculating trust and finally in order to verify the quality and efficiency of the proposed model, a numerical example is also offered.

Keywords


Akkermans, H., Bogerd, P., & Van Doremalen, J. (2004). Travail, transparency and trust: A
case study of computer-supported collaborative supply chain planning in high-tech
electronics. European Journal of Operational Research, 153(2), 445-456.
Binmore, K. G. (1998). Game theory and the social contract: Playing fair (Vol. 2). The MIT
Press.
Casella, R. (2003). Zero tolerance policy in schools: Rationale, consequences, and
alternatives. The Teachers College Record, 105(5), 872-892
Castaldo, S., Premazzi, K., & Zerbini, F. (2010). The meaning (s) of trust. A content analysis
on the diverse conceptualizations of trust in scholarly research on business relationships.
Journal of Business Ethics, 96(4), 657-668.
Day, M., Fawcett, S. E., Fawcett, A. M., & Magnan, G. M. (2013). Trust and relational
embeddedness: Exploring a paradox of trust pattern development in key supplier
relationships Industrial Marketing Management.
Devangan, L., Amit, R. K., Mehta, P., Swami, S., & Shanker, K. (2012). Individually rational
buyback contracts with inventory level dependent demand. International Journal of
Production Economics.
Di, X., Wei, D., & Yun-hong, H. (2012). Buy Back Contract Based on Quality Effort in
Supply chain. In Frontiers in Computer Education (pp. 313-323). Springer Berlin Heidelberg
Esfandiari, B., & Chandrasekharan, S. (2001, May). On how agents make friends:
Mechanisms for trust acquisition. In Proceedings of the Fourth Workshop on Deception,
Fraud and Trust in Agent Societies, Montreal, Canada (pp. 27-34).
Gambetta, D. (1990). Trust: Making and breaking cooperative relations
Gelman, D., & Buchwald, S. L. (2003). Efficient palladiumÔÇÉcatalyzed coupling of aryl
chlorides and tosylates with terminal alkynes: Use of a copper cocatalyst inhibits the reaction
Angewandte Chemie International Edition, 42(48), 5993-5996.
Hassan, J., Sirisena, H., & Landfeldt, B. (2008). Trust-based fast authentication for multiwireless
networks. Mobile Computing, IEEE Transactions on, 7(2), 247-261.

Hung, H. C., & Wang, T. W. (2011). Determinants and mapping of collective perceptions of
technological risk: the case of the second nuclear power plant in Taiwan. Risk analysis,
31(4), 668-683.
Huynh, T. D., Jennings, N. R., & Shadbolt, N. R. (2006, May). Certified reputation: how an
Agent can trust a stranger. In Proceedings of the fifth international joint conference on
Autonomous agents and multiagent systems (pp. 1217-1224). ACM.
Jøsang, A., & Sanderud, G. (2003, January). Security in mobile communications: challenges
and opportunities. In Proceedings of the Australasian information security workshop
conference on ACSW frontiers 2003-Volume 21 (pp. 43-48). Australian Computer
Society,Inc.
Kamvar, S. D., Schlosser, M. T., & Garcia-Molina, H. (2003, May). The eigentrust algorithm
for reputation management in p2p networks. In Proceedings of the 12th international
conference on World Wide Web (pp. 640-651). ACM
Keren, B. and Pliskin, J. S. (2006). A benchmark solution for the risk-averse vendorproblem.
European Journal of Operational Research, 174(3):1643–1650.
Khouja, M. (1999). The single-period (news-vendor) problem: literature review and
suggestions for future research. Omega, 27(5), 537-553.
Kwon, I. W. G., & Suh, T. (2004). Factors affecting the level of trust and commitment in
supply chain relationships. Journal of Supply Chain Management, 40(1), 4-14.
Lau, N., Hasija, S., & Bearden, J. N. (2014). Newsvendor pull-to-center reconsidered.
Decision Support Systems, 58, 68-73.
Lewis, J. D., & Weigert, A. (1985). Trust as a social reality. Social forces, 63(4), 967-985.
Li, X., Li, Y., & Cai, X. (2012). Quantity decisions in a supply chain with early returns
remanufacturing. International Journal of Production Research, 50(8), 2161-2173.
Lin, Y. H., Chen, J. M., & Chiang, T. C. (2010). Channel coordination for a newsvendor
problem with return and quantity discount. Journal of Information and Optimization Sciences
31(4), 857-873.
Mcknight, D. H. and Chervany, N. L. “The meanings of trust: University of Minnesota,
Technical reports”.http://misrc.umn.edu/wpaper/WorkingPapers/9604.pdf, 1996.
Marsh, S. (1994). Trust in distributed artificial intelligence. In Artificial Social Systems (pp.
94-112). Springer Berlin Heidelberg.
Mejia, M., ChaparroVargas, R. (2013). Distributed Trust and Reputation Mechanisms for
Vehicular Ad-Hoc Networks.

Nguyen, D. Q., Lamont, L., & Mason, P. C. (2009). On trust evaluation in mobile ad-hoc
networks. In Security and Privacy in Mobile Information and Communication Systems (pp.
1-13). Springer Berlin Heidelberg
Nguyen, H. T., Zhao, W., & Yang, J. (2010, July). A trust and reputation model based on
bayesian network for Web services. In Web Services (ICWS), 2010 IEEE International
Conference on (pp. 251-258). IEEE.
Panayides, P. M., & Venus Lun, Y. H. (2009). The impact of trust on innovativeness and
supply chain performance. International Journal of Production Economics, 122(1), 35-46.
Petruzzi, N. C., & Dada, M. (1999). Pricing and the newsvendor problem: A review with
extensions. Operations Research, 47(2), 183-194.
Qin, Y., Wang, R., Vakharia, A. J., Chen, Y., & Seref, M. M. (2011). The newsvendor
problem: Review and directions for future research. European Journal of Operational
Research, 213(2), 361-374.
Romp, G. (1997). Game theory: introduction and applications. OUP Catalogue.
Shakouri, H., Menhaj, M.B. (2008). “A single fuzzy rule to smooth the sharpness of mixed
Data: Time and frequency domains analysis”, Fuzzy Sets & Systems (FSS), No. 159, pp.
2446 -2465.
Shubik, M. (2006). Game theory in the social sciences: Concepts and solutions.
Staples, D. S., & Webster, J. (2008). Exploring the effects of trust, task interdependence and
virtualness on knowledge sharing in teams. Information Systems Journal, 18(6), 617-640.
Vivekananth, P. (2011, May). Enhanced reliable trust model for grid computing based on
reputation. In Proceedings of the 2011 international conference on Computers and computing
(pp. 39-45). World Scientific and Engineering Academy and Society (WSEAS).
Wang, C., & Chen, X. (2013). Fresh Produce Supply Chain Management Decisions with
Circulation Loss and Options Contracts. In LISS 2012 (pp. 643-647). Springer Berlin
Heidelberg.
Wang, Y., & Singh, M. P. (2007, January). Formal Trust Model for Multiagent Systems. In
IJCAI (Vol. 7, pp. 1551-1556).
Williamson, O. E. (1993). Calculativeness, trust, and economic organization. Journal of law
and economics, 453-486.
Xu, J., Wei, J., & Jun, T. (2012). Comparing improvement strategies for inventory
inaccuracy in a two-echelon supply chain. European Journal of Operational Research, 221(1),
213.