5,417 research outputs found

    ā€œSupply Disruptions, Asymmetric Information, and a Dual Sourcing Option

    Full text link
    We study a manufacturer's strategic use of a dual-sourcing option when facing suppliers who possess private information about their likelihood of experiencing a supply disruption. The manufacturer can diversify its supply by ordering from both suppliers, but we find that the cost of doing so is inflated under asymmetric information due to the suppliers' incentives to misrepresent their reliabilities. If the manufacturer instead sole-sources, competition between the suppliers curbs their informational rents. Therefore, asymmetric information pushes the manufacturer away from diversification and towards sole-sourcing. Surprisingly, the additional cost that asymmetric information imposes on diversification may cause the manufacturer to cease diversifying in reaction to uniformly eroding supply base reliability, while it would do just the opposite under symmetric information. Despite these trends away from diversification, the value of the dual-sourcing option should not be underestimated for manufacturers who are unsure of their suppliers' reliabilities - the dual-sourcing option is actually more valuable under asymmetric information than under symmetric information if the manufacturer's cost of replacing a unit lost due to a disruption is moderate. We also analyze the eect of codependence between supply disruptions, and find that a reduction in supplier codependence increases the manufacturer's value of information. Therefore, strategic actions to reduce codependence between supply disruptions should not be seen as a substitute for learning about the suppliers' reliabilities.http://deepblue.lib.umich.edu/bitstream/2027.42/61153/1/1116_Damian.pd

    Research on Cooperative Advertising Decisions in Dual-Channel Supply Chain Under Asymmetric Demand Information When Online Channel Implements Discount Promotion

    Get PDF
    This paper analyzes the both online-channel price discount and advertising decisions in a dual-channel supply chain involved one manufacturer and one retailer. A Stackelberg game dominated by the manufacturer is established. The influence of asymmetric demand information is analyzed. The study shows that retailer has a motivation to lie about the offline demand information and it always announces a higher advertising impact factor. To induce the retailer to reveal to true demand information, a franchise-fee contract is designed

    Essays on Supply Chain Optimization: Operational Decisions With Corporate Social Responsibility Implementation and Live-streaming Channel Introduction

    Get PDF
    In this dissertation, we study a supplier\u27s operational decisions for supply chain optimization considering corporate social responsibility implementation and live- streaming channel introduction. Both essays start from analytical models that are inspired by observations, and we explore how different parameters affect the supplier\u27s decisions through extensive numerical studies. In the first essay, we notice that cost auditing is becoming an increasingly important tool to improve supply chain efficiency and mitigate the influence of information asymmetry. We study how cost auditing indirectly influences retailer and supplier\u27s behavior in social responsibility. We also discuss the potential negative social responsibility externalities of conducting an audit and the managerial insights. Finally, we find that customers\u27 attitude towards different products changes retailer and supplier\u27s social responsibility preference. In the second essay, we are interested in a new trend where suppliers today adopt live-streaming channels for online shopping. We analyze the trade-off between potential market demand and channel competition by introducing live-streaming channel and discuss the impact of live-streaming channel on supply chain optimization. As a result, both essays shed light on how suppliers respond to downstream companies\u27 operational decisions

    Asymmetric Information Mitigation in Supply Chain: A Systematic Literature Review

    Get PDF
    With the level of competition and consumer demand is changing rapidly, the speed and accuracy of the information flow in the supply chain increasingly necessary. Sharing of information between the parties in a supply chain plays an important role in improving the sustainability of a business, but imperfection information is inevitable because each party in the supply chain has a different objective. This condition increases the importance of a research on the mitigation of asymmetric information in the supply chain, therefore the purpose of this study was to conduct a review of previous studies related to overcoming the asymmetric information and map research trend on mitigating asymmetric information in the supply chain. We used systematic literature review (SLR) methods to analyze the data collected from Web of Science and Scopus database from 2005 to 2016. The results of this study can be used as a guide and a reference for further research related to overcoming the asymmetry of information in the supply chain in every industrial sector

    Exclusive Territories and Manufacturersā€™ Collusion

    Get PDF
    This paper highlights the rationale for exclusive territories in a model of repeated interaction between competing supply chains. We show that with observable contracts exclusive territories have two countervailing effects on manufacturers' incentives to sustain tacit collusion. First, granting local monopolies to retailers distributing a given brand softens inter- and intrabrand competition in a one-shot game. Hence, punishment profits are larger, thereby rendering deviation more profitable. Second, exclusive territories stifle deviation profits because retailers of competing brands can adjust their pricing decisions to the wholesale contract offered by a deviant manufacturer, whilst intrabrand competition prevents such `instantaneous reaction'. We show that the latter effect tends to dominate the former, whereby making exclusive territories a more suitable organizational mode to sustain upstream cooperation. These insights carry over when manufacturers voluntarily decide whether to disclose contracts and can change the distribution mode every period; moreover, they strengthen under imperfect intrabrand competition. Finally, we extend the model to allow for retailers' service investments. Here a novel effect emerges under exclusive territories: a retailer of the deviant manufacturer increases its service investment as a response to a lower wholesale price. This renders deviation more profitable, thereby softening the pro-collusive effect of exclusive territories.Exclusive territories, supply chains, tacit collusion, information sharing, vertical restraints.

    Supply Disruptions, Asymmetric Information and a Backup Production Option

    Full text link
    We study a manufacturer that faces a supplier privileged with private information about supply disruptions. We investigate how risk-management strategies of the manufacturer change, and examine whether risk-management tools are more, or less, valuable, in the presence of such asymmetric information. We model a supply chain with one manufacturer and one supplier, in which the supplier's reliability is either high or low and is the supplier's private information. Upon disruption the supplier chooses between paying a penalty to the manufacturer for the shortfall and using backup production to fill the manufacturer's order. Using mechanism design theory, we derive the optimal contract menu offered by the manufacturer. We find that information asymmetry may cause the less reliable supplier type to stop using backup production while the more reliable supplier type continues to use it. Additionally, the manufacturer may stop ordering from the less reliable supplier type altogether. The value of backup production for the manufacturer is not necessarily larger under symmetric information and, for the more reliable supplier type, it could be negative . The manufacturer is willing to pay the most for information when backup production is moderately expensive. The value of information may increase as supplier types become uniformly more reliable. Thus, higher reliability need not be a substitute for better information.http://deepblue.lib.umich.edu/bitstream/2027.42/58722/1/1110-Damian.pd

    Combining Spot and Futures Markets: A Hybrid Market Approach to Dynamic Spectrum Access

    Full text link
    Dynamic spectrum access is a new paradigm of secondary spectrum utilization and sharing. It allows unlicensed secondary users (SUs) to exploit opportunistically the under-utilized licensed spectrum. Market mechanism is a widely-used promising means to regulate the consuming behaviours of users and, hence, achieves the efficient allocation and consumption of limited resources. In this paper, we propose and study a hybrid secondary spectrum market consisting of both the futures market and the spot market, in which SUs (buyers) purchase under-utilized licensed spectrum from a spectrum regulator, either through predefined contracts via the futures market, or through spot transactions via the spot market. We focus on the optimal spectrum allocation among SUs in an exogenous hybrid market that maximizes the secondary spectrum utilization efficiency. The problem is challenging due to the stochasticity and asymmetry of network information. To solve this problem, we first derive an off-line optimal allocation policy that maximizes the ex-ante expected spectrum utilization efficiency based on the stochastic distribution of network information. We then propose an on-line VickreyCClarkeCGroves (VCG) auction that determines the real-time allocation and pricing of every spectrum based on the realized network information and the pre-derived off-line policy. We further show that with the spatial frequency reuse, the proposed VCG auction is NP-hard; hence, it is not suitable for on-line implementation, especially in a large-scale market. To this end, we propose a heuristics approach based on an on-line VCG-like mechanism with polynomial-time complexity, and further characterize the corresponding performance loss bound analytically. We finally provide extensive numerical results to evaluate the performance of the proposed solutions.Comment: This manuscript is the complete technical report for the journal version published in INFORMS Operations Researc
    • ā€¦
    corecore