Journal ArticleDOI
Competitive and Cooperative Inventory Policies in a Two-Stage Supply Chain
Gérard P. Cachon,Paul Zipkin +1 more
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TLDR
In this article, the authors consider a two-stage serial supply chain with stationary stochastic demand and fixed transportation times, and compare the policies chosen under this competitive regime to those selected to minimize total supply chain costs, i.e., the optimal solution.Abstract:
We investigate a two-stage serial supply chain with stationary stochastic demand and fixed transportation times. Inventory holding costs are charged at each stage, and each stage may incur a consumer backorder penalty cost, e.g. the upper stage (the supplier) may dislike backorders at the lower stage (the retailer). We consider two games. In both, the stages independently choose base stock policies to minimize their costs. The games differ in how the firms track their inventory levels (in one, the firms are committed to tracking echelon inventory; in the other they track local inventory). We compare the policies chosen under this competitive regime to those selected to minimize total supply chain costs, i.e., the optimal solution. We show that the games (nearly always) have a unique Nash equilibrium, and it differs from the optimal solution. Hence, competition reduces efficiency. Furthermore, the two games' equilibria are different, so the tracking method influences strategic behavior. We show that the system optimal solution can be achieved as a Nash equilibrium using simple linear transfer payments. The value of cooperation is context specific: In some settings competition increases total cost by only a fraction of a percent, whereas in other settings the cost increase is enormous. We also discuss Stackelberg equilibria.read more
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Book ChapterDOI
Supply Chain Coordination with Contracts
TL;DR: This chapter extends the newsvendor model by allowing the retailer to choose the retail price in addition to the stocking quantity, and discusses an infinite horizon stochastic demand model in which the retailer receives replenishments from a supplier after a constant lead time.
Journal ArticleDOI
The Value of Information Sharing in a Two-Level Supply Chain
TL;DR: In this article, a simple two-level supply chain with nonstationary end demands is analyzed and the authors show that the value of demand information sharing can be quite high, especially when demands are significantly correlated over time.
Journal ArticleDOI
Supply chain design and analysis:: Models and methods
TL;DR: In this article, the authors provide a focused review of literature in multi-stage supply chain modeling and define a research agenda for future research in this area, which is largely a result of the rising costs of manufacturing, the shrinking resources of manufacturing bases, shortened product life cycles, the leveling of the playing field within manufacturing, and the globalization of market economies.
Journal ArticleDOI
Flow Coordination and Information Sharing in Supply Chains: Review, Implications, and Directions for Future Research
Funda Sahin,E. Powell Robinson +1 more
TL;DR: This research attempts to help fill gaps in the current body of knowledge in the value of information sharing and physical flow coordination in the e-business arena by surveying prior research in the area, categorized in terms of information shares and flow coordination.
Book ChapterDOI
Game Theory in Supply Chain Analysis
TL;DR: Game theory is a powerful tool for analyzing situations in which the decisions of multiple agents affect each agent's payoff as discussed by the authors and deals with interactive optimization problems, such as games with imperfect information and auctions.
References
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Journal ArticleDOI
Modeling managerial behavior: misperceptions of feedback in a dynamic decision making experiment
TL;DR: In this paper, the authors report an experiment on the generation of macrodynamics from microstructure in a common managerial context, where subjects manage a simulated inventory distribution system which contains multiple actors, feedbacks, nonlinearities, and time delays.
Book
A Course in Microeconomic Theory
TL;DR: This article developed a text in microeconomics that succeeds in being bothchallenging and user-friendly, designed for final-year undergraduate and graduate students of microeconomic theory, with numerous problem sets and exercises.
Journal ArticleDOI
Optimal Policies for a Multi-Echelon Inventory Problem
Andrew J. Clark,Herbert E. Scarf +1 more
TL;DR: The problem of determining optimal purchasing quantities in a multi-installation model of this type, which arises when there are several installations, is considered.
Journal ArticleDOI
Optimal Pricing and Return Policies for Perishable Commodities
TL;DR: It is proven, however, that a pricing and return policy in which a manufacturer offers retailers a partial credit for all unsold goods can achieve channel coordination in a multi-retailer environment.