Supply Chains in Network Economy (original) (raw)
Supply chain echelons normally base their operational decisions on average values of the parameters that depend on other members. However, in real-life operation the variability of said parameters decreases the link profits. Thus, a cooperative arrangement may be devised in which a link agrees to reduce the variability of its behavior to enhance the performance of other links, receiving compensation in return. This work shows the application of simulation and decision trees to assess the feasibility of this cooperation scheme, from the perspective of the central link of a three member supply chain. First, the operational parameters of the link are optimized for mean values of the variables set by adjacent members. Then, by simulating the system for different probability distributions of these variables, graphs of the expected link gain versus the variances of the distributions are plotted. The results are incorporated to decision trees to evaluate the collaboration feasibility. It was found that the increased variability of the behavior of one neighboring member decreases the benefit of lowering the variability of the behavior of the other. The manuscript closes with a discussion of the practical viability of this collaboration scheme.
Application of Cooperative Game Theory in Supply Chain Management : A Survey
Recent emphasis on competition and cooperation on supply chain has resulted in the resurgence of game theory as a relevant tool for analyzing such situation in supply chain. This paper present a review of papers concerned with cooperative game theoretical application in supply chain management (SCM). We first give a brief summary of cooperative game such as Shapley value, nucleous, and the core. Our review of application of cooperative game theory is presented in following areas: (1) Inventory Games, (2) Production and pricing competition. We will provide the mean for supply chain partners selection for supply chain formation based on supply chain optimization problem (MVA). We will show that when payment is made by using Shapley value the resulted coalition is stable and no manger will find worth to deviate from coalition and truth telling is best strategy for each stage manager. The paper concludes with summary of our review and suggestion for potential use of game theory in SCM.
A Model for Designing Non Cooperative Supply Chain Where Logistics Service Providers Take Part
This paper presents a mathematical model for the problem of designing not cooperative supply chain where the logistic service providers take part. In this problem, manufacturers are not collaborating or having any type of bargaining strategy among them, they compete for supplying products to retailers seeking to maximize their profit. Logistics service providers also compete among them for providing logistics services to manufacturers and delivering products to retailers. It is considered that manufacturers, logistics service providers and retailers collaborate to maximize services. Normally this problem can not be modeled as an optimization problem and we use a variational inequality approach to formulate it. The model determines the optimal level of production for each manufacturer, the flows of products between manufacturers and retailers, the flow of products each logistics service provider is going to move and the price retailers are willing to pay to manufacturer in a non-cooperative environment. We demonstrate and discuss theory results regarding existence and uniqueness of the solution for the model. An example is presented to illustrate some properties of the problem.
Supply Chain Networks with Multicritera Decision Makers
Transportation and Traffic Theory in the 21st Century, 2002
This paper presents a theoretical framework for supply chain network modeling, analysis, and computation in the presence of competition, in which all the decision-makers, who are located at distinct tiers of the network, are multicriteria decision-makers. In particular, in this framework, transportation time and transportation cost are explicit criteria and these can depend on the service level provided. The optimality conditions of the different tiers of decision-makers, consisting of manufacturers, retailers, and consumers are derived, as well as the equilibrium conditions of the integrated model. The variational inequality formulation of the governing equilibrium conditions is then utilized to obtain qualitative properties as well as a computational procedure for the determination of the equilibrium product shipments between the tiers of the network, the prices, as well as the service levels.
Supply chains : ago-antagonistic systems through co-opetition game theory lens
2009
Supply chain configurations, as hybrid governance structures, allow companies to be sufficiently integrated while keeping a certain level of flexibility. This enables them, on one hand, to converge towards common interests through the development of cooperation; and on the other hand, to diverge on their own interests by remaining in competition. This dynamics generates an ago-antagonistic system where both of these two concepts, namely cooperation and competition, simultaneously drive the supply chain. In the present article, this system is analyzed by using the co-opetition game theory developed by in order to highlight the importance of such an apprehension of the supply chain approach. , Istanbul, TURKIYE
Coopetitive Supply Chains: Toward a Social Ties Perspective
Management : Journal of Contemporary Management Issues, 2013
This research note examines the impact of information systems on the spreading of collaborative logistical practices between rival companies in the same market. Numerous pooling experiments are conducted, in France particularly, that lead manufacturers to voluntarily share resources and logistical activities. A large number of academic works highlights the main aspects of logistical collaborative strategies though emphasis is on the part played by information systems. It is at least as important to understand how competing companies will collaborate to implement a shared information system, even if it means disseminating strategic and confidential data outside their premises. This research note suggests widening the analysis by pointing out that the success of coopetitive strategies in supply chain networks also implies the weaving of powerful social ties between decision makers.
COOPERATIVE AND NON-COOPERATIVE STRATEGIES IN A THREE-NODE SERIAL SUPPLY CHAIN
In this paper we explore the relations between the nodes of a serial supply chain and analyze cooperation and non-cooperation strategies as far as inventory control is concerned. We consider a serial, three-node, supply chain consisting of one manufacturer, one retailer and one supplier. We investigate three different non-cooperative strategies. Each strategy corresponds to the control of the inventory by one of the supply chain' s nodes. In addition we investigate a cooperation strategy, through revenue sharing contracts, between the supply chain nodes.
Decision making in the supply network
2009
A supply network comprises a set of production entities. Each production entity is both specific and autonomous. Yet the production entities are collectively responsible for procurement, manufacturing and distribution activities associated with one or more families of related products. Controlling the supply network requires integration rather than governance of the different production entities. To this aim, the intelligent product concept is introduced.
Game-theoretic analysis of cooperation among supply chain agents: Review and extensions
European Journal of Operational Research, 2008
This paper surveys some applications of cooperative game theory to supply chain management. Special emphasis is placed on two important aspects of cooperative games: profit allocation and stability. The paper first describes the construction of the set of feasible outcomes in commonly seen supply chain models, and then uses cooperative bargaining models to find allocations of the profit pie between supply chain partners. In doing so, several models are analyzed and surveyed, and include suppliers selling to competing retailers, and assemblers negotiating with component manufacturers selling complementary components. The second part of the paper discusses the issue of coalition formation among supply chain partners. An exhaustive survey of commonly used stability concepts is presented. Further, new ideas such as farsightedness among supply chain players are also discussed and analyzed. The paper also opens some avenues of future research in applying cooperative game theory to supply chain management.