This paper studies a decentralized supply chain in which a manufacturer sells a common generic product through two traditional and online retailers under free riding market. We assume that the traditional retailer provides the value added services but the online retailer does not. Factors such as retail prices, local advertising of the retailers, global advertising of the manufacturer and servi...

In the course of globalization, many enterprises change their strategies and are coupled in partnerships with suppliers, subcontractors and customers. This coupling forms supply chains comprising several geographically distributed production facilities. Production planning in a supply chain is a complicated and difficult task, as it has to be optimal both for the local manufacturing units and f...

We analyze a firm designing and selling a seasonal product with demand uncertainty and a single ordering opportunity. Prior to the start of the selling season, product quality and inventory must be jointly determined; a higher quality product results in a greater selling price but also greater marginal production cost. We consider both a centralized supply chain, in which a single firm determin...

T paper studies a two-echelon assembly system and explores several important issues in managing decentralized supply chains. First, we investigate the behavior of the assembly system under decentralized control. It is shown that the Nash equilibrium of the competitive assembly system exists but is never system optimal. Next, we examine the role of information in the assembly system. We consider...

One of the most important things in pursuit of supply chain management is to prevent sub-optimization caused by decentralized decision making over the various entities. As a solution of the issue, supply chain coordination approach has frequently been used. However, a coordinated supply chain might fail to provide additional profit to one of the players. A supply chain contract can be to achiev...

In the operations management literature, decentralization is often associated with the double marginalization problem. However, in this chapter, we review several existing papers that demonstrate how decentralization can be beneficial to supply chain performance. A key premise in this literature is that consumers are strategic: They rationally anticipate and respond to future market conditions....

We address the value of information (VOI) sharing in the context of a two–echelon, serial supply chain with one retailer and one supplier that provides a single perishable product to consumers. We evaluate information sharing under two supply chain structures where the retailer shares it inventory level and replenishment policy with the supplier. In the first structure, referred to as Decentral...

Members of supply chain carry inventory for different purposes. To effectively reduce the cost of inventory, information sharing mechanism is the key. The inventory can be managed in two ways in supply chain systems. The first one is the centralized inventory management system, in which, the information of inventory is highly exchanged among supply chain members. The other is the decentralized ...

In a decentralized supply chain, with long-term competition between independent retailers facing random demands and buying from a common supplier, how should wholesale and retail prices be specified, in an attempt to maximize supply-chain wide profits? We show what types of coordination mechanisms allow the decentralized supply chain to generate aggregate expected profits equal to the optimal p...

Abstract: Based on two substitute products, we study the inventory and contract coordination strategy of a three-echelon supply chain, which consists of two suppliers, a manufacturer and a retailer, under supply disruption and stochastic demand. We investigate the channel gross profit model of the centralized supply chain and obtain a unique optimal order quantity. Under a decentralized decisio...