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.
|Publication status||Published - 6 Jan 2019|
|Event||The 10th POMS-HK International Conference 2019 : Operations Excellence for a Better World - City University of Hong Kong, Hong Kong|
Duration: 5 Jan 2019 → 6 Jan 2019
http://www.cb.cityu.edu.hk/ms/pomshk2019/conferenceprogram.htm (Conference program)
|Conference||The 10th POMS-HK International Conference 2019 : Operations Excellence for a Better World|
|Period||5/01/19 → 6/01/19|
|Other||The 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.|