Rathnasiri, Sahani (2020) Designing Optimal Strategies for E-Commerce Supply Chains: Contracts and Optimisation Modelling Approach. PhD thesis, Victoria University.

Abstract

Supply chain organisations have been showing a greater interest in embedding e-commerce applications into their operations due to its significant benefits. These benefits include greater efficiency, lower costs, and simplified transaction processes. The exponential increase in consumer demand for online shopping has heightened the importance of improving operational effectiveness and performance in e-commerce supply chains. Presently, the operational paradigm of these supply chains is shifting towards implementing advanced technologies to enhance operational effectiveness. However, several operational and decision-making issues directly impede the performance outcomes of e-commerce supply chains. These include ineffective coordination and integration, unproductive costs, asymmetric information, and conflicts of interest. Hence, there is a need to explore optimal strategies that can improve the operational effectiveness of e-commerce supply chains while eliminating such decision-making problems. This research investigates how to design optimal strategies to eliminate decision-making and strategic interaction issues in e-tailing supply chains based on contracts and optimisation modelling approach. This study considers the operational context of small/medium scale and start-up e-tailer supply chains, which consist of an e-tailer, product supplier and a third-party logistics (3PL) operator. This study develops four models based on game theory concepts, supply chain contracts, accounting methods, and blockchain technology while adopting a multi-objective optimisation (MOO) approach to solve these models. In the first model, a cost-sharing contract is developed, considering the operational context of the e-tailer supply chain to derive optimal supply chain strategies. The contract model aims to eliminate issues of information asymmetry, ineffective coordination and sub-optimal costs. The findings reveal that the proposed cost-sharing contract obtain optimal outcomes with significant cost reductions to overall supply chain costs and eliminate asymmetric information. In the second model, the base contract model is extended by introducing consistent incentives through a dynamic cost-sharing contract to obtain long-term integration. The consistency constraints ensure high incentive levels over multi-period operations, thereby guaranteeing that the supply chain members remain within the total contract period. Therefore, it reduces the possibility of re-negotiation and enables long-term integration. Different accounting methods change cost information, and therefore, it is vital to identify a suitable accounting method to measure costs and obtain accurate information for e-commerce supply chains. Thus, this study analyses the impact of various accounting methods used to estimate costs on supply chain contract designs and cost minimisation. Finally, the feasibility of implementing blockchain technology is discussed to address the strategic issues, and its benefits are compared with a traditional e-commerce supply chain operation. Blockchain implementation ensures complete information sharing and thus improves transparency and streamlines the operational flow of the e-commerce supply chain. The findings highlight that blockchain technology can improve e-commerce supply chain operations substantially, with cost minimisation. Overall, this research contributes to the knowledge of supply chain management by demonstrating the use of several optimal strategies to create effective e-commerce supply chain outcomes. The research findings also provide insights for managers and decision-makers to improve performance levels in real-world e-commerce supply chain organisations.

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