Impacts of Leader–Follower Structure on Pricing and Production Strategies in a Decentralized Assembly System

2017 ◽  
Vol 34 (01) ◽  
pp. 1740003 ◽  
Author(s):  
Guo Li ◽  
Hui Mao ◽  
Lei Xiao
Keyword(s):  
Supply Chain ◽  
Chain Structure ◽  
Equilibrium Price ◽  
Production Costs ◽  
The Other ◽  
Decentralized Supply Chain ◽  
Production Strategies ◽  
Production Quantity ◽  
Supply Chain Structure ◽  
Monotonic Relation

The last decade has witnessed an increase in the number of big-data-based businesses, in particular for those industries with complicated supply chain structure. This paper investigates the pricing and production strategies in a decentralized supply chain composed of a manufacturer, a key supplier, and a general supplier. We establish two different leader–follower structure models. One is the key supplier–leader game, in which the key supplier decides the prices for the other two components, and the manufacturer and general supplier determine the order and production quantities, respectively. The other model is the manufacturer–leader game, in which the manufacturer offers the prices for the other two components, and the suppliers determine the product quantities. We show that equilibrium price and production quantity under the key supplier–leader game are higher than those under the manufacturer–leader game. The key supplier–leader game is suitable for the channel. Moreover, we show that channel payoff has a non-monotonic relation with the production cost of suppliers; it initially increases and then decreases with production costs.

The Evolution of Inter-Firm Collaboration in Supply Chain Networks

2012 ◽  
Vol 2 (3) ◽  
pp. 1-31 ◽  
Author(s):  
Michael J. Gravier ◽  
M. Theodore Farris
Keyword(s):  
Supply Chain ◽  
Economies Of Scale ◽  
Supply And Demand ◽  
Dynamic Network ◽  
Product Market ◽  
Chain Structure ◽  
Production Costs ◽  
Supply Chain Networks ◽  
Exchange Governance ◽  
Supply Chain Structure

To date, no published study has measured the evolution of supply chain structure and relationships in response to changing product-market development requirements. This research draws upon production literature and exchange governance theory to simulate the interaction of supply and demand environment factors on the growth and development of supply chain relationships. Experiments were conducted to study the effects of different rates of product change, different demand environments, and different economies of scale on the level of integration between firms at different levels in the supply chain. It synthesizes the interrelationships of the simulation variables in order to extend TCA theory into a dynamic network environment by using the CAS paradigm. The study reveals definite patterns of evolution under conditions of differing product-market conditions, it confirms the importance of the balancing transaction and production costs, and it highlights the asymmetries of transactional and production costs in relationships.

The relationship between internal supply chain structure and operational performance: survey results from Japanese manufacturers

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mikihisa Nakano ◽  
Kazuki Matsuyama
Keyword(s):  
Supply Chain ◽  
Structural Properties ◽  
Operations Management ◽  
Chain Structure ◽  
Operational Performance ◽  
Equation Modeling ◽  
Content Type ◽  
Wide Range ◽  
Supply Chain Structure ◽  
The Relationship

Purpose The purpose of this paper is to discuss the roles of a supply chain management (SCM) department. To achieve that, this study empirically examines the relationship between internal supply chain structure and operational performance, using survey data collected from 108 Japanese manufacturers. Design/methodology/approach Based on a literature review of not only organizational theory but also other fields such as marketing, logistics management, operations management and SCM, this study focused on two structural properties, formalization and centralization and divided operational performance to firm-centric efficiency and customer-centric responsiveness. To examine the analytical model using these dimensions, this study conducted a structural equation modeling. Findings The correlation between centralization of operational tasks and centralization of strategic tasks, the impacts of centralization of both tasks on formalization and the effect of formalization on responsiveness performance were demonstrated. In addition, the reasons for formalization not positively influencing efficiency performance were explored through follow-up interviews. Practical implications Manufacturers need to formalize, as much as possible, a wide range of SCM tasks to realize operational excellence. To establish such formalized working methods, it is effective to centralize the authorities of both operational and strategic tasks in a particular department. In addition, inefficiency due to strict logistics service levels is a problem that all players involved in the supply chain of various industries should work together to solve. Originality/value The theoretical contribution of this study is that the authors established an empirical process that redefined the constructs of formalization and centralization, developed these measures and examined the impacts of these structural properties on operational performance.

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