TY - BOOK

T1 - Analysis of a decentralized supply chain under partial cooperation

AU - Güllü, R.

AU - Houtum, van, G.J.J.A.N.

AU - Sargut, F.Z.

AU - Erkip, N.

PY - 2003

Y1 - 2003

N2 - In this article we analyze a decentralized supply chain consisting of a supplier and two
independent retailers. In each order cycle retailers place their orders at the supplier
to minimize inventory related expected costs at the end of their respective response
times. There are two types of lead-times involved. At the end of the supplier lead-time,
retailers are given an opportunity to readjust their initial orders (without changing the
total order size) so that both retailers can improve their expected costs at the end of
respective retailer lead-times (the time it takes for items to be shipped from the supplier
to the retailers). Because of the possibility of cooperation at the end of supplier leadtime,
each retailer will consider the other's order-up-to level in making the ordering
decision. Under mild conditions we prove the existence of a unique Nash equilibrium for
the retailer order-up-to levels, and show that they can be obtained by solving a set of
newsboy-like equations. We also present computational analysis that provides valuable
managerial insight for design and operation of decentralized systems under possibility of
partial cooperation.

AB - In this article we analyze a decentralized supply chain consisting of a supplier and two
independent retailers. In each order cycle retailers place their orders at the supplier
to minimize inventory related expected costs at the end of their respective response
times. There are two types of lead-times involved. At the end of the supplier lead-time,
retailers are given an opportunity to readjust their initial orders (without changing the
total order size) so that both retailers can improve their expected costs at the end of
respective retailer lead-times (the time it takes for items to be shipped from the supplier
to the retailers). Because of the possibility of cooperation at the end of supplier leadtime,
each retailer will consider the other's order-up-to level in making the ordering
decision. Under mild conditions we prove the existence of a unique Nash equilibrium for
the retailer order-up-to levels, and show that they can be obtained by solving a set of
newsboy-like equations. We also present computational analysis that provides valuable
managerial insight for design and operation of decentralized systems under possibility of
partial cooperation.

M3 - Report

SN - 90-386-1568-X

T3 - BETA publicatie : working papers

BT - Analysis of a decentralized supply chain under partial cooperation

PB - Technische Universiteit Eindhoven

CY - Eindhoven

ER -