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Abstract
We investigate a three-echelon supply chain in which a distributor at the middle echelon negotiates two wholesale price contracts with his upstream manufacturer and downstream retailer. In the first stage, the distributor decides on whether to first negotiate with the manufacturer or with the retailer; in the second (combined, noncooperative-cooperative, game) stage, the two negotiations are conducted sequentially. We …nd that the supply chain can be coordinated if the distributor first negotiates with the retailer. The distributor should choose the negotiation sequence for supply chain coordination, if he has a sufficiently large (small) relative bargaining power in the negotiation with the manufacturer (the retailer). We also extend our analysis to the cases in which the distributor and the manufacturer negotiate a buyback or two-part tariff contract, and draw similar outcomes when the distributor first negotiates with the retailer. In addition, under the two-part tariff contract, the distributor prefers to first negotiate with the retailer if the manufacturer has a sufficiently high disagreement payoff whereas, under the buyback contract, the distributor always prefers to first negotiate with the firm with a stronger bargaining power. Moreover, the two-part tariff (buyback) contract cannot (can) always coordinate the supply chain.
Original language | English |
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Pages (from-to) | 1096-1107 |
Number of pages | 12 |
Journal | European Journal of Operational Research |
Volume | 294 |
Issue number | 3 |
Early online date | 11 Feb 2021 |
DOIs | |
Publication status | Published - 1 Nov 2021 |
Funding
The first two authors (i.e., Feimin Zhong and Zhongbao Zhou) were supported by the National Natural Science Foundation of China (Nos. 71801086 , 71771082 ), the Hunan Provincial Key Laboratory (No. 2020TP1013), and the Natural Science Foundation of Hunan Province (Nos. 2019JJ50083, 2017JJ1012). The third author (Mingming Leng) was supported by the General Research Fund (GRF) of the Hong Kong Research Grants Council under Research Project No. LU13500020.
Keywords
- Supply Chain management
- negotiation sequence
- pricing
- coopetitive game
- generalized Nash bargaining solution
Projects
- 1 Finished
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Incentivizing the System-Wide Adoption of Blockchain Technology in a Food Supply Chain: A Cooperative Game Approach (激励在食品供应链中全系统采用区块链技术:一种合作博弈方法)
LENG, M. (PI), PARLAR, M. (CoI) & SOSIC, G. (CoI)
Research Grants Council (HKSAR)
1/01/21 → 31/12/22
Project: Grant Research