Competition decision models between supply chains under linear demand and asymmetric information

This paper discusses competition decision issues between two supply chains, in which each one has one manufacturer selling a substitutable product through one retailer who faces a linear price-sensitive demand. We assume that there exists asymmetric cost information between the two supply chains, an...

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Bibliographic Details
Published in2009 IEEE International Conference on Industrial Engineering and Engineering Management pp. 1617 - 1621
Main Authors Baixun Li, Yongwu Zhou, Bitao Peng
Format Conference Proceeding
LanguageEnglish
Published IEEE 01.12.2009
Subjects
Asymmetric Information
Companies
Cost function
Decision
Informatics
Pricing
Production
Pulp manufacturing
Stackelberg Game
Supply chains
Toy industry
Uncertainty
Virtual manufacturing
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Summary:This paper discusses competition decision issues between two supply chains, in which each one has one manufacturer selling a substitutable product through one retailer who faces a linear price-sensitive demand. We assume that there exists asymmetric cost information between the two supply chains, and that the two chains as well as two members in each chain follow the Stackelberg game setting. We analyze four competition scenarios: both chains are decentralized; both chains are centralized; the leader chain is decentralized and the follower centralized; the leader is centralized and the follower decentralized. We find that the centralized decision is the dominant strategy for the leader, whereas for the follower the optimal strategy chosen depends on the production cost and the intensity of competition between two chains as well as on actions of the leader.
ISBN:1424448697
9781424448692
ISSN:2157-3611
2157-362X
DOI:10.1109/IEEM.2009.5373115