TY - JOUR
T1 - Game-theoretic analyses of decentralized assembly supply chains : non-cooperative equilibria vs. coordination with cost-sharing contracts
AU - LENG, Mingming
AU - PARLAR, Mahmut
PY - 2010/7/1
Y1 - 2010/7/1
N2 - This paper considers a multiple-supplier, single manufacturer assembly supply chain where the suppliers produce components of a short life-cycle product which is assembled by the manufacturer. In this single-period problem the suppliers determine their production quantities and the manufacturer chooses the retail price. We assume that the manufacturer faces a random price-dependent demand in either additive or multiplicative form. For each case, we analyze both simultaneous-move and leader-follower games to respectively determine the Nash and Stackelberg equilibria, and find the globally-optimal solution that maximizes the system-wide expected profit. Then, we introduce appropriate buy-back and lost-sales cost-sharing contracts to coordinate this assembly supply chain, so that when all the suppliers and the manufacturer adopt their equilibrium solutions, the system-wide expected profit is maximized.
AB - This paper considers a multiple-supplier, single manufacturer assembly supply chain where the suppliers produce components of a short life-cycle product which is assembled by the manufacturer. In this single-period problem the suppliers determine their production quantities and the manufacturer chooses the retail price. We assume that the manufacturer faces a random price-dependent demand in either additive or multiplicative form. For each case, we analyze both simultaneous-move and leader-follower games to respectively determine the Nash and Stackelberg equilibria, and find the globally-optimal solution that maximizes the system-wide expected profit. Then, we introduce appropriate buy-back and lost-sales cost-sharing contracts to coordinate this assembly supply chain, so that when all the suppliers and the manufacturer adopt their equilibrium solutions, the system-wide expected profit is maximized.
KW - Assembly supply chain
KW - Buy-back
KW - Game theory
KW - Lost-sales cost-sharing
UR - http://commons.ln.edu.hk/sw_master/163
UR - http://www.scopus.com/inward/record.url?scp=70449639538&partnerID=8YFLogxK
U2 - 10.1016/j.ejor.2009.10.011
DO - 10.1016/j.ejor.2009.10.011
M3 - Journal Article (refereed)
SN - 0377-2217
VL - 204
SP - 96
EP - 104
JO - European Journal of Operational Research
JF - European Journal of Operational Research
IS - 1
ER -