B2B electronic commerce has become an important issue in the debate about electronic commerce. How should the intermediary charge suppliers and buyers to maximize profits from such a marketplace? We analyze a monopolistic B2B marketplace owned by an independent intermediary. The marketplace exhibits two-sided network externalities where the value of the marketplace to buyers is dependent on the...

Internet based marketplaces have enabled industrial buyers to locate suppliers from geographically diverse locations. This has resulted in increased variations in certain supplier parameters such as capacity and cost among the participating suppliers. However, the impact of this increased heterogeneity on the procurement practices are not well understood. In this paper we consider three supplie...

In freight consolidation, a “fair” cost allocation scheme is critical for forming and sustaining horizontal cooperation that leads to reduced transportation cost. We study a cost-sharing problem in a freight consolidation system with one consolidation center and a common destination. In particular, we design a mechanism that collects bids from a set of suppliers, and then decides whose demand t...

This paper studies the optimal procurement of a large-scale project. The project consists of several subprojects to be procured in a predetermined order and yields its full return upon completion. In the unique Markov perfect equilibrium of the dynamic procurement game, I find that: (1) Even though the procurer lacks long term commitment power, both the procurer and suppliers strictly prefer th...

This paper examines how competition among suppliers affects their willingness to provide trade credit financing. Trade credit extended by a supplier to a cash constrained retailer allows the latter to increase cash purchases from its other suppliers, leading to a free rider problem. A supplier that represents a smaller share of the retailer’s purchases internalizes a smaller part of the benefit...

In this research we model and estimate the effects on productivity downstream from information technology (IT) investments made upstream. Specifically, we examine how one industry’s productivity is affected by the IT capital stock of its suppliers. These supplier-driven IT spillovers occur because, due to competition in the supplying industry, quality benefits from suppliers’ IT investments can...

Despite business-to-government (B2G) electronic auction (e-auction) markets being a way for suppliers to create opportunities for market expansion and for trading activities, little has been done to understand the behaviour of suppliers participating in these markets. In this paper, we propose a framework to explain suppliers’ intention to participate, and the level of participation in B2G eauc...

We consider the problem of a newsvendor that is served by multiple suppliers, where any given supplier may be unreliable. By unreliable we simply mean that the marginal amount received from a supplier is no more than, and typically is less than, the marginal amount ordered from the supplier. In this setting, the newsvendor needs to determine (1) whether or not to place an order with a given sup...

Successful cooperation between large manufacturers and their suppliers is a crucial aspect, especially in the automotive industry. Such mutually beneficial cooperation requires at least a certain level of integration and interoperation of the partners’ IT and e-business systems. This chapter looks at two approaches in order to achieve this goal: sector-specific harmonization (in the form of ele...

A review of the literature regarding the suppliers’ impact on the new product development (NPD) process is provided as a primer to those considering this imitative. The primer shows how the benefits of integrating suppliers within a firm’s NPD design team can be categorized as better, cheaper, or faster. The risks of such involvement and how a firm can increase its chances of a more successful ...