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Full-Text Articles in Management Sciences and Quantitative Methods
Do Competing Suppliers Maximize Profits As Theory Suggests? An Empirical Evaluation, Ehsan Elahi, Roger Blake
Do Competing Suppliers Maximize Profits As Theory Suggests? An Empirical Evaluation, Ehsan Elahi, Roger Blake
Ehsan Elahi
This research compares results from laboratory experiments with predictions from theory for decisions made by competing suppliers. We consider a supply chain in which a single buyer outsources the manufacture of a commodity product to suppliers not on the basis of price, but rather on service. Three different criteria on which suppliers compete are evaluated: 1) a guaranteed specific inventory fill-rate, 2) guaranteed level of base-stock, and 3) a parameter optimizing the supply chain in the buyer’s favor. Our results show that in most cases, suppliers’ decisions are significantly different than the Nash equilibrium, meaning that they do not maximize …
Outsourcing Through Competition: What Is The Best Competition Parameter?, Ehsan Elahi
Outsourcing Through Competition: What Is The Best Competition Parameter?, Ehsan Elahi
Ehsan Elahi
In this paper we consider a single buyer who wants to outsource the manufacturing of a product to N potential suppliers. The buyer’s objective is to maximize the service level she receives from the suppliers. The suppliers compete for the buyer’s demand based on a competition parameter which the buyer announces along with an allocation rule. We model each supplier as a make-to-stock queueing system. Using a simple proportional allocation function, we compare two competition parameters: service level and inventory level. We show that inventory competition creates a higher overall service level for the buyer. We also show an optimal …
How Can We Improve The Performance Of Supply Chain Contracts? An Experimental Study, Ehsan Elahi, Narasimha Lamba, Chinthana Ramaswamy
How Can We Improve The Performance Of Supply Chain Contracts? An Experimental Study, Ehsan Elahi, Narasimha Lamba, Chinthana Ramaswamy
Ehsan Elahi
Although optimal forms of supply chain contracts have been widely studied in the literature, it has also been observed that decision makers fail to make optimal decisions in these contract setups. In this research, we propose different approaches to improve the performance of supply chain contracts in practice. We consider revenue sharing and buyback contracts between a rational supplier and a retailer who, unlike the supplier, is susceptible to decision errors. We propose five approaches to improve the retailer’s decisions which are in response to contract terms offered by the supplier. Through laboratory experiments, we examine the effectiveness of each …