Incentive-driven bilateral transshipment in inventory competition

Weixin SHANG; Qi FU

Incentive-driven bilateral transshipment in inventory competition

Weixin SHANG
, Qi FU

Lingnan University

Research output: Other Conference Contributions › Presentation

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 language	English
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, China Duration: 5 Jan 2019 → 6 Jan 2019 http://www.cb.cityu.edu.hk/ms/pomshk2019/conferenceprogram.htm (Conference program)

Conference

Conference	The 10th POMS-HK International Conference 2019 : Operations Excellence for a Better World
Country/Territory	Hong Kong, China
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.
Internet address	http://www.cb.cityu.edu.hk/ms/pomshk2019/conferenceprogram.htm (Conference program)

Cite this

@conference{2053f07582cc4513a5d683af7f809104,

title = "Incentive-driven bilateral transshipment in inventory competition",

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.",

author = "Weixin SHANG and Qi FU",

year = "2019",

month = jan,

day = "6",

language = "English",

note = "The 10th POMS-HK International Conference 2019 : Operations Excellence for a Better World ; Conference date: 05-01-2019 Through 06-01-2019",

url = "http://www.cb.cityu.edu.hk/ms/pomshk2019/conferenceprogram.htm",

}

TY - CONF

T1 - Incentive-driven bilateral transshipment in inventory competition

AU - SHANG, Weixin

AU - FU, Qi

PY - 2019/1/6

Y1 - 2019/1/6

N2 - 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.

AB - 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.

UR - http://www.cb.cityu.edu.hk/ms/pomshk2019/POMSHK2019%20Abstracts.pdf

M3 - Presentation

T2 - The 10th POMS-HK International Conference 2019 : Operations Excellence for a Better World

Y2 - 5 January 2019 through 6 January 2019

ER -

Incentive-driven bilateral transshipment in inventory competition

Abstract

Conference

Other files and links

Fingerprint

Cite this