scholarly journals Supply Chain Competition: A Market Game Approach

2020 ◽  
Vol 66 (12) ◽  
pp. 5648-5664 ◽  
Author(s):  
C. Gizem Korpeoglu ◽  
Ersin Körpeoğlu ◽  
Soo-Haeng Cho
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Operations Management ◽  
Wholesale Price ◽  
Market Price ◽  
Market Game ◽  
Wholesale Market ◽  
Supply Chain Competition ◽  
Local Supply ◽  
Buyer Power

We study supply chains where multiple suppliers sell to multiple retailers through a wholesale market. In practice, we often observe that both suppliers and retailers tend to influence the wholesale market price that retailers pay to suppliers. However, existing models of supply chain competition do not capture retailers’ influence on the wholesale price (i.e., buyer power) and show that the wholesale price and the order quantity per retailer do not change with the number of retailers. To overcome this limitation, we develop a competition model based on the market game mechanism in which the wholesale price is determined based on both suppliers’ and retailers’ decisions. When taking into account retailers’ buyer power, we obtain the result that is consistent with the observed practice: As the number of retailers increases, each retailer’s buyer power decreases, and each retailer is willing to pay more for her order, so the wholesale price increases. In this case, supply chain expansion to include more retailers (or suppliers) turns out to be more beneficial in terms of supply chain efficiency than what the prior literature shows without considering buyer power. Finally, we analyze the integration of two local supply chains and show that although the profit of the integrated supply chain is greater than the sum of total profits of local supply chains, integration may reduce the total profit of firms in a retailer-oriented supply chain that has more retailers than suppliers. This paper was accepted by Charles Corbett, operations management.

scholarly journals The Optimal Production Decision of Competing Supply Chains When Considering Green Degree: A Game-Theoretic Approach

2020 ◽  
Vol 12 (18) ◽  
pp. 7413
Author(s):  
Jiguang Wang ◽  
Jianhong Chang ◽  
Yucai Wu
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Wholesale Price ◽  
Dominant Strategy ◽  
Green Product ◽  
Theoretic Approach ◽  
Optimal Production ◽  
Supply Chain Competition ◽  
Game Theoretic ◽  
The Difference

Nowadays, the green supply chain has become an exciting concept in academic societies. This paper focuses on the optimal production decisions of two competing supply chains from the perspective of green degree. The manufacturers in each supply chain have two options—producing a green product or a non-green product. Game theory is applied to study four decision scenarios, which are derived from the difference in the products of the two supply chains. This study investigates the influence of inter-supply-chain competition on the wholesale price, green degree, and profits of the supply chain members. The results indicate that the inter-supply-chain competition has a negative correlation with the wholesale price. The inter-supply-chain competition has a significant impact on green degree in the four decision scenarios. In addition, green products are not always the dominant strategy of manufacturers. Both the competitors’ product decisions and the degree of inter-supply-chain competition should be considered. Finally, weak inter-supply-chain competition is beneficial to the leader supply chain, while strong competition is beneficial to the follower supply chain.

scholarly journals Supply Chains and Antitrust Governance

2021 ◽  
Author(s):  
Nitish Jain ◽  
Sameer Hasija ◽  
Serguei Netessine
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Operations Management ◽  
Demand Uncertainty ◽  
Wholesale Price ◽  
Minimum Order ◽  
Fair Competition ◽  
Legal Costs ◽  
Contract Structure ◽  
Fixed Fee

Antitrust regulations are meant to promote fair competition in the market, but balancing administrative and legal costs with enforcement can be difficult when multilayered supply chains are involved. The canonical example of this challenge is the landmark Illinois Brick ruling, which limits antitrust damages to only the direct purchasers of a product; for instance, consumers can file antitrust claims against colluding retailers but not against colluding manufacturers—only retailers can file claims against manufacturers. This controversial ruling was meant to reduce legal costs, but it can clearly lead to missed enforcement opportunities. In this paper, we demonstrate how the Illinois Brick ruling interacts with contracts adopted in the supply chain, and we show that otherwise equivalent supply chain arrangements can have markedly different effects. In particular, we find that wholesale price, minimum order quantity, revenue sharing, and quantity discount contracts lead retailers to take legal action against manufacturers in the event of collusive behavior. However, the wholesale price plus fixed fee contract structure (also known as a two-part tariff or slotting fee contract) facilitates collusion among the manufacturers with retailers compensated by the fixed fee and not filing the antitrust litigation. We further demonstrate that collusion is more likely under high demand uncertainty and high competition at the retail level but is less likely under high competition at the manufacturer level. Our paper helps public enforcers identify market conditions conducive to antitrust violations. This paper was accepted by Vishal Gaur, operations management.

Vertical Contracts in a Supply Chain and the Bullwhip Effect

2020 ◽  
Author(s):  
Zhan Qu ◽  
Horst Raff
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Operations Management ◽  
Bullwhip Effect ◽  
Price Effect ◽  
Demand Shocks

This paper shows that decentralized supply chains, in which upstream firms use linear wholesale prices, may experience lower upstream production and downstream sales volatility than vertically integrated supply chains and may be less susceptible to the bullwhip effect by which the variance of upstream production exceeds the variance of downstream sales. The reason is that decentralized supply chains exhibit a price effect, whereby upstream producers raise wholesale prices in the case of positive demand shocks and lower wholesale prices in the case of negative demand shocks. Whereas upstream producers benefit from the price effect and, thus, from a dampening of the bullwhip effect, downstream firms may lose, and overall supply chain profit may decrease. This paper was accepted by Vishal Gaur, operations management.

scholarly journals Horizontal Coalition Stability Analysis of Supply Chain Entities Based on Sequential Game

2014 ◽  
Vol 2014 ◽  
pp. 1-10 ◽  
Author(s):  
Shizhao Wang ◽  
Yong Luo
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Market Price ◽  
Sensitivity Coefficient ◽  
Game Model ◽  
Nash Game ◽  
Sequential Game ◽  
Second Stage ◽  
Coalition Stability ◽  
Reasonable Range

Aiming to find the effect of the same status entities’ horizontal coordination on supply chain, this paper studied the coalition stability of dealers in a two-stage supply chain with one supplier and multiple dealers. First, a vertical sequential game model is built, where the supplier is leader and the multiple dealers are followers. In the second stage of the game, multiple dealers face two selections: playing Nash game with each other or developing a coalition. Then, according to the results acquired by comparing the dealers’ profits which depend on their coalition situations, the criterion of coalition stability is developed. Finally, numerical simulation is used to verify the validity of the model, and some insights are obtained. For example, if the sensitivity coefficientTof the market price is fixed, dealers’ coalition tends to be stable with the increasing of the substitution ratekin a reasonable range; the supplier’s optimal wholesale price is constant with and without dealer’s coalition, but dealers’ coalition causes demand to decrease, which leads to the decrease of the supplier’s profit too. The result of this paper provides an important reference for the formation of dealers’ coalition in IT or automobile supply chain.

Strategic Inventories Under Supply Chain Competition

2021 ◽  
Author(s):  
Xi Li ◽  
Yanzhi Li ◽  
Ying-Ju Chen
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Distribution Channel ◽  
Problem Definition ◽  
Supply Chain Competition ◽  
Managerial Implications ◽  
Holding Cost ◽  
Inventory Holding ◽  
Period Model

Problem definition: We consider the effects of strategic inventory (SI) in the presence of chain-to-chain competition in a two-period model. Academic/practical relevance: Established findings suggest that SI may alleviate double marginalization and improve the efficiency of a decentralized distribution channel. However, no studies consider the role of SI under chain-to-chain competition. Methodology: We build a two-period model consisting of two competing supply chains, each with an upstream manufacturer and an exclusive retailer. The retailers compete on either price or quantity. We characterize the firms’ strategies under the concept of perfect Bayesian equilibrium. We consider cases where contracts are either observable or unobservable across supply chains. Results: (1) SI still exists under chain-to-chain competition. Retailers may carry more inventory when the competition becomes fiercer, which further intensifies the supply chain competition. (2) Different from the existing findings, SI may backfire and hurt all firms. Interestingly, firms may benefit from a higher inventory holding cost. (3) Under supply chain competition, the prisoner’s dilemma can arise if competition intensity is intermediate; in other words, manufacturers are better off without strategic inventory, and yet they cannot help allowing strategic inventory, which is the unique equilibrium. Managerial implications: Despite its appeal among firms of a single supply chain, the role of SI is altered or even reversed by chain-to-chain competition. Conventional wisdom on SI should be applied with caution.

Farm business financial performance in local foods value chains

2018 ◽  
Vol 78 (4) ◽  
pp. 470-488 ◽  
Author(s):  
Mary Clare Ahearn ◽  
Kathleen Liang ◽  
Stephan Goetz
Keyword(s):  
Supply Chain ◽  
Financial Performance ◽  
Supply Chains ◽  
Food System ◽  
Choice Model ◽  
Direct Marketing ◽  
Small Samples ◽  
Local Foods ◽  
Content Type ◽  
Local Supply

PurposeThe purpose of this paper is to identify the factors associated with farm financial success for those farms known to produce for local supply chains. The analysis considers alternative measures of farm financial performance and considers the role of the local foods supply chain in the choice to market locally.Design/methodology/approachThe paper uses a two-stage Heckman approach which addresses the possibility of sample selection bias. In the first stage, the choice model to engage in direct marketing is estimated. In the second stage, the authors estimate a model of the financial performance of those in the sample that direct marketed which includes an IMR term calculated from the parameters of the first stage equation. The analysis uses national farm-level data from the Agricultural and Resource Management Survey of the US Department of Agriculture and combines data from 2009 to 2012 to overcome the constraint of small samples.FindingsIndicators of the development of a local foods supply were positively related to the choice to engage in direct marketing. Factors affecting farm financial performance varied significantly between a short-term and a long-term measure. The results emphasize the importance of considering multiple outcome measures, developing local supply chains and provide implications about beginning farms.Originality/valueIf a local foods system is going to thrive, the farms that market the agricultural products in the local food system must attain a certain level of profitability. The value of the analysis is an improved understanding of the financial performance of farms producing for a small, but growing segment of the food supply chain.

Information Disclosure Model Under Supply Chain Competition with Asymmetric Demand Disruption

2016 ◽  
Vol 33 (06) ◽  
pp. 1650043 ◽  
Author(s):  
Kebing Chen ◽  
Renxing Xu ◽  
Hanwei Fang
Keyword(s):  
Supply Chain ◽  
Asymmetric Information ◽  
Information Disclosure ◽  
Information Structure ◽  
Wholesale Price ◽  
Retail Price ◽  
Supply Side ◽  
Full Information ◽  
Supply Chain Competition ◽  
Information Rent

This paper develops the game models of two symmetric supply chains, each consisting of one manufacturer and one retailer, while both retailers compete in the market with a linear function. The disclosure mechanism is designed when the information of the disrupted demand is asymmetric between supply side and retail side. We first study the model with the full information as a benchmark to explore the effect of asymmetric information on the system. In the case, each manufacturer maximizes her profit while the downstream retailer only obtains the reservation profit. For the case of asymmetric information, each manufacturer can obtain the real information of the disrupted demand by using a menu of contract bundles. For each information structure, there are always robust regions for each manufacturer’s original trading quantity scheme. That is, when the disrupted amount of the demand is sufficiently small, the trading quantity will be unchanged. However, some special measures, e.g., the higher unit wholesale price, should be taken to prevent the retailer from deviating the trading quantity scheme. The high-disruption retailer gets the higher profit due to the information rent. Compared with a single supply chain, Cournot competition results in the less retail price and the lower performance for the whole system.

scholarly journals Research on Supply Chain Efficiency in COVID-19: The Role of Information and Communications

2021 ◽  
Vol 11 (3) ◽  
pp. 23-35
Author(s):  
R. S. Rogulin ◽  
R. S. Pavlyuk ◽  
N. R. Talitskikh
Keyword(s):  
Economic Development ◽  
Supply Chain ◽  
Supply Chains ◽  
Information And Communication Technologies ◽  
National Level ◽  
Study Results ◽  
Local Supply ◽  
Global And Local ◽  
The Impact

Information and communication technologies (ICT) have become an integral part of our life. Currently, supply chain (SC) management is also in a digital transformation, especially during the period of disruptions in global and local supply chains caused by the COVID-19 pandemic. The purpose of this study is to provide an empirical descriptive analysis of the role of digital technologies in improving the efficiency and recovery of SC in the pre-crisis period as well as in a pandemic. The research is based on the processing of statistical data and macroeconomic indicators that are freely available. The following are considered as basic indicators: Gross domestic product as a characteristic of the country's economic development level before the crisis; logistics efficiency index; digital life index. The authors have chosen few countries from different categories for the comparative analysis in the context of the selected assessment indicators The obtained study results confirmed the significant role of ICT in the efficiency improving and restoration of SC which had been destroyed in COVID-19. It is concluded that developed economies showed a high efficiency of their logistics systems at the national level and high values of the digital life rating. At the same time, the influence of ICT on the logistics system performance was not decisive in countries with average economic development and below ones. The results of this study can be used by companies' top management of various levels to build a strategy and tactics for their development including crisis management. The research methods and data can be applied to further explore the impact of ICT on the recovery and efficiency of global and local supply chains, including the updated data with the account of coronavirus pandemic impact to indicators which were used in the paper.

scholarly journals Pengaruh Persaingan Dan Kekuatan Pembeli Terhadap Hubungan Pemasok-Ritel Modern Di Jakarta

2018 ◽  
Vol 18 (1) ◽  
pp. 19
Author(s):  
Dedie S. Martadisastra
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Market Share ◽  
Initial Study ◽  
Processed Foods ◽  
Business Relationships ◽  
Supplier Relationships ◽  
Supply Chain Strategy ◽  
Buyer Power ◽  
Formed Part

The  aim  of the  study was to investigate the  development  of domestic supplier  perfrmances  as the  result of modem  retail-supplier  business  relationships which they  had  controlled  by the  effect of combinations  on competition and buyer power.  The  paper  presents  the  results  of a  survey  of packaged  processed  foods suppliers,  which  formed  part  of a  wider  study  of  buyer-supplier  relationships  in Indonesia's modem  retail supply chains. The findings of this study indicate that the results demonstrate the heterogeneity relationships between supplier and modem retail in the main commodity grocery sectors. The extent to which modem retail challenged by competition,  supply chain strategy and market share are likely to influence the way in  which modem retail deal with suppliers.  A part of the suppliers indicated that they get benefited  substantially from the presence of modem retail,  however, they also face several  challenges  brought    about  by buyer  power as  imposition  of several  unfair relationship terms, price fixing, and poorly supervision as cause of the development and growth of suppliers limitedly. This study attempts to show the results of the research in Indonesia to empirically measure the effect of competition and buyer power on modem retail-supplier relationships. The further research is needed to refine the results of this initial study. 

scholarly journals Control Model for Intelligent and Demand-Driven Supply Chains

2012 ◽  
pp. 262-283
Author(s):  
Jan Strandhagen ◽  
Heidi C. Dreyer ◽  
Anita Romsdal
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Operations Management ◽  
Relevant Information ◽  
Control Model ◽  
Information And Communications Technology ◽  
Future Research ◽  
Small Scale ◽  
Information And Communication ◽  
Trust And Power

Orchestrating supply chains is challenging. This chapter describes how to control a supply chain to make it truly demand-driven – based on the assumption that all relevant information is made available to all partners in real time. The chapter explores the elements of a framework for intelligent and demand-driven supply chain control, with regards to the overall concept and associated principles, and demonstrates these in a case example. Challenges to the realization of the proposed control model include trust and power, supply chain dynamicity and uncertainty, and required investments in competence, standardization, and information and communication technology. Some of these can be met through initial small-scale implementations of the proposed model, to demonstrate effects, and by exploiting facilities for information sharing and collaboration, like supply chain dashboards and control studios. Future research within operations management, technology and information and communications technology (ICT) will support broader realization of the proposed control model.

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