It is common for a retailer to sell products from competing manufacturers. How then should the firms manage their contract negotiations? The supply chain coordination literature focuses either on a single manufacturer selling to a single retailer or one manufacturer selling to many (possibly competing) retailers. We find that some key conclusions from those market structures do not apply in our setting, where multiple manufacturers sell through a single retailer. We allow the manufacturers to compete for the retailer's business using one of three types of contracts: a wholesale-price contract, a quantity-discount contract, or a two-part tariff. It is well known that the latter two, more sophisticated contracts enable the manufacturer to coordinate the supply chain, thereby maximizing the profits available to the firms. More importantly, they allow the manufacturer to extract rents from the retailer, in theory allowing the manufacturer to leave the retailer with only her reservation profit. However, we show that in our market structure these two sophisticated contracts force the manufacturers to compete more aggressively relative to when they only offer wholesale-price contracts, and this may leave them worse off and the retailer substantially better off. In other words, although in a serial supply chain a retailer may have just cause to fear quantity discounts and two-part tariffs, a retailer may actually prefer those contracts when offered by competing manufacturers. We conclude that the properties a contractual form exhibits in a one-manufacturer supply chain may not carry over to the realistic setting in which multiple manufacturers must compete to sell their goods through the same retailer.

/pdf/competing-manufacturers-in-a-retail-supply-chain-on-1tazb3jtbp.pdf

Competing Manufacturers in a Retail Supply Chain: On Contractual Form and Coordination

This work explores the impact of quick response on supply chain performance for various supply chain structures with strategic customer behavior. By investigating pricing and inventory decisions in decentralized supply chains under revenue-sharing contracts and in centralized supply chains, we study the performance of four various systems and compare the value of quick response in different supply chain structures. The results show that if the extra cost of quick response is relatively low, the value of quick response would be greater in centralized systems than in decentralized systems. On the other hand, if the extra cost is high, decentralized supply chains reap more incremental profits from adopting quick response. We also find that revenue-sharing contracts enable a decentralized supply chain to outperform a centralized supply chain, but only allow limited flexibility of allocating total profits between a manufacturer and a retailer.

/pdf/quick-response-and-supply-chain-structure-with-strategic-1tvgmmgre3.pdf

Quick response and supply chain structure with strategic consumers

Supply chain has received a great deal of attention both in academia and industry The carbon emissions from supply chain activities are the major concern, therefore, many governments have implemented carbon taxes to promote energy conservation and emission reduction Under this background, the impact of the carbon taxes on supply chain and the related operational decisions become hot topics This paper aimed to review the researches on supply chain management under carbon tax First, the descriptive results and a bibliometric analysis of identified articles during 2010–2019 was presented to clarify the development in this field Then, content analysis is conducted to classify the selected articles into facility location decisions, supplier selection and order quantity, low carbon technology choice and investment, production planning, transportation decisions, pricing decisions, joint decisions and supply chain coordination under carbon taxes The research progress in these areas was systematically reviewed and summarized Finally, future directions were discussed from the perspectives of problem and method

Supply chain management under carbon taxes: A review and bibliometric analysis

In the last decade, food and drink supply chain management has become an important part of global operations strategy. The global food and drink industries (FDIs) is establishing supply chain opera...

The role of Artificial Intelligence networks in sustainable supply chain finance for food and drink industry

This paper aims to present various three-level service contracts among the following three participants: a manufacturer, an agent and a customer. The interaction between the aforementioned participants will be modeled using the game theory approach. Under non-cooperative and cooperative games, the optimal sale price, warranty period and warranty price for the manufacturer and the optimal maintenance cost (repair cost) and marketing expenditure for the agent are obtained by maximizing their profits. The satisfaction of the customer is also maximized by being able to choose one of the suggested options from the manufacturer and the agent, based on the risk parameter.,Three-echelon supply chains with marketing and warranty services are studied. Game-theoretic approaches (non-cooperative and cooperative) are presented. The non-cooperative approaches are static (NE) and dynamic (Stakelberg) models. The cooperative approach is related to bargaining models (Nash bargaining games). The authors develop a sensitivity analysis of some parameters and their effect.,Based on the mentioned drawbacks (i.e. lack of a model containing warranty, marketing and pricing), despite their importance, a developed model is proposed in this research to cover one of the research gaps. In addition, main contributions of this paper that differentiate it from the existing papers are regarding inventory, lost sale and lost goodwill, which are significant in the comparison environment. Another advantage of this study is related to the solution approach, the game theory. Twofold of the games theoretical, i.e. cooperative (in three forms) and non-cooperative are considered, because of their importance. Three types of non-cooperative games are presented as follows: Nash equilibrium – each echelon decides respectively and simultaneously; manufacturer-Stackelberg – the manufacturer has more power than the agent and the agent has more power than the customer; and customer-Stackelberg – customer is leader of the agent and the agent is the leader of manufacturer. The involved cooperative game in this paper is the bargaining problem that the participants can determine how to share the additional profits.,In this paper, various three-level service contracts will be presented among the following three participants: a manufacturer, an agent and a customer. The interaction between the aforementioned participants will be modeled using the game theory approach. Under non-cooperative and cooperative games, the optimal sale price, warranty period and warranty price for the manufacturer and the optimal maintenance cost (repair cost) and marketing expenditure for the agent are obtained by maximizing their profits. The satisfaction of the customer is also maximized by being able to choose one of the suggested options from the manufacturer and the agent, based on the risk parameter. Several numerical examples are used to illustrate the models presented in this paper. Finally, the authors develop a sensitivity analysis of some parameters and their effects on the objective functions.

A three-level supply chain with warranty services, pricing and marketing decisions: Competition and cooperation analysis

With supply chains evolving into complex networks of diverse and independent economic entities, supply chain coordination has emerged as a key management capability for improving overall performance of the network. For long term sustainability, it is important that such networks remain stable with little incentive for players to sever their linkages, especially in supply chains with participative constraints on their members. While topic of coordination has received vast attention from both academia and practitioners, the issues related to network stability have not been addressed adequately. In order to bridge this gap in the literature, we focus on a two tier supply chain network competing with independent producers. The network involves a marketing agent that coordinates activities among the network producers via a price and pro t sharing based coordination mechanism.We develop a (noncooperative) game theoretic model and analyze the impact of the coordination mechanism on stability of the network. In particular, we focus on three factors: cost parameters, number of producers vis-a-vis level of competition, and profit sharing. We derive response functions for the players involved and show that optimal decisions by coordination leads to Nash equilibrium for the supply chain. In addition, we develop structural results to characterize stability of the network. Our results show, that while profit sharing parameter of the coordination mechanism has no impact on network surplus, it has implications for network stability. These results bring out relationship between the factors of interest and provide insights for determining the decision parameters of the coordination mechanism.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2144682_code1871889.pdf?abstractid=2144682&mirid=4

Stability Issues in Supply Chain Networks: Implications for Coordination Mechanisms

https://repository.iimb.ac.in/bitstream/123456789/590/1/WP_IIMB_307.pdf

Stability issues in supply chain networks: Implications for coordination mechanisms

In this chapter, we formulate and solve a math-programming model for Milk and Milk Products Cooperative (MMPC) – a cooperative organization with its shareholders as milk producing member farmers in India. The joint procurement, production and marketing problem of this supply-driven cooperative is characterized by highly perishable raw material, i.e., milk, exhibiting unmatched peaks of supply and demand seasons in a year. The product portfolio of MMPC consists of both high and low return products, and not all products can be inventoried for long periods without refrigeration. Moreover, MMPC adopts a pricing and inventorying strategy keeping in view the expectations of both its suppliers and consumers. In this regard, it is essential for the cooperative to develop annual plans well before the supply season peaks.

Procurement, Production and Marketing at Supply-Driven Milk and Milk Products Cooperative

The train design problem (also called "block-to-train assignment problem") is a difficult combinatorial optimization problem encountered daily in the freight railroad industry. In 2011, the Railway Applications Society (RAS) of the professional society INFORMS had set up a competition problem of this based on a simplified real-life instance, which is the basis for this chapter. In this chapter we discuss this problem, and develop an algorithm for it based on the minimum cost spanning tree approach, and the solution of the RAS 2011 contest problem using it.

Omkar D. Palsule-Desai

Papers

Stability Issues in Supply Chain Networks: Implications for Coordination Mechanisms

Stability issues in supply chain networks: Implications for coordination mechanisms

Procurement, Production and Marketing at Supply-Driven Milk and Milk Products Cooperative

Freight Transport by Rail