Incentive-driven bilateral transshipment in inventory competition

Research output: Other Conference ContributionsPresentationPresentation

Abstract

We construct a two-stage game model to examine the transshipment and inventory decisions in overlapping markets with both customer switching and transshipment. We find that there could be no transshipment, partial transshipment, or full transshipment, and obtain the conditions under which a unique equilibrium of order quantities exists. We show that transshipment may intensify or mitigate inventory competition and that there can exist a real incentive for competing firms to transship to others cooperatively. We show the existence of coordinating transshipment prices under which the transshipment and inventory decisions of the competing firms mimic those of the centralized optimal decisions.
Original languageEnglish
Publication statusPublished - 6 Jan 2019
EventThe 10th POMS-HK International Conference 2019 : Operations Excellence for a Better World - City University of Hong Kong, Hong Kong
Duration: 5 Jan 20196 Jan 2019
http://www.cb.cityu.edu.hk/ms/pomshk2019/conferenceprogram.htm (Conference program)

Conference

ConferenceThe 10th POMS-HK International Conference 2019 : Operations Excellence for a Better World
CountryHong Kong
Period5/01/196/01/19
OtherThe Tenth POMS-HK International Conference was organized by City University of Hong Kong from January 5 to 6, 2019. Under the theme Operations Excellence for a Better World, this conference intended to provide a platform for exchanging research ideas, industry practice, and managerial insights.
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SHANG, W., & FU, Q. (2019). Incentive-driven bilateral transshipment in inventory competition. The 10th POMS-HK International Conference 2019 : Operations Excellence for a Better World, Hong Kong.