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Operations and Supply Chain Management
University of Massachusetts Boston
Management Science and Information Systems Faculty Publication Series
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Full-Text Articles in Business
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
Management Science and Information Systems Faculty Publication Series
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 …
An Experimental Investigation Of Outsourcing Through Competition, Ehsan Elahi, Roger Blake
An Experimental Investigation Of Outsourcing Through Competition, Ehsan Elahi, Roger Blake
Management Science and Information Systems Faculty Publication Series
Our research uses laboratory experiments to examine the theoretical results of competition between suppliers in an outsourcing setup. We consider a supply chain in which a single buyer needs to outsource the manufacturing of a product among N potential suppliers. The buyer allocates demand to suppliers not on the basis of price, but rather on service. We analyze the levels of service suppliers will decide to provide when competing on three different criteria specified by the buyer. For the first, suppliers compete by providing the buyer a specific service level (fill-rate), and for the second by maintaining a specific quantity …
Outsourcing Through Competition: What Is The Best Competition Parameter?, Ehsan Elahi
Outsourcing Through Competition: What Is The Best Competition Parameter?, Ehsan Elahi
Management Science and Information Systems Faculty Publication Series
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 Risk Management Can Turn Into Competitive Advantage: Examples And Rationale, Ehsan Elahi
How Risk Management Can Turn Into Competitive Advantage: Examples And Rationale, Ehsan Elahi
Management Science and Information Systems Faculty Publication Series
In light of the occurrence of many disruptive events since the beginning of this millennium, we can observe a change in the way risks and uncertainties are being viewed in the business world. To put this change into perspective we compare the evolution in the companies’ perception of risk management with the evolution in how companies look at their supply chain management. The main driver behind the change in the way companies view risk management is the increased level of uncertainties. There are many evidences that suggest the current very high level of volatilities in the business world is going …
Outsourcing Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Outsourcing Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Management Science and Information Systems Faculty Publication Series
We consider a single buyer who wishes to outsource a fixed demand for a manufactured good or service at a fixed price to a set of potential suppliers. We examine the value of competition as a mechanism for the buyer to elicit service quality from the suppliers. We compare two approaches the buyer could use to orchestrate this competition: (1) a Supplier-Allocation (SA) approach, which allocates a proportion of demand to each supplier with the proportion allocated to a supplier increasing in the quality of service the supplier promises to offer, and (2) a Supplier-Selection (SS) approach, which allocates all …
Outsourcing To Non-Identical Suppliers Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Outsourcing To Non-Identical Suppliers Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Management Science and Information Systems Faculty Publication Series
In this paper, we consider a single buyer who wishes to outsource a fixed demand for a manufactured good or service at a fixed price to a set of N suppliers. We examine the value of competition as a mechanism for the buyer to elicit good service quality from her suppliers. In particular, we consider a scheme in which the buyer allocates a proportion of demand to each supplier, with the proportion a supplier receives increasing in the service level she offers. Suppliers compete for expected market share, which increases in the offered service level. The suppliers affect their service …
Inventory Competition In Make-To-Stock Systems, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Inventory Competition In Make-To-Stock Systems, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Management Science and Information Systems Faculty Publication Series
We present models for competition among multiple suppliers for demand from a single manufacturer. The suppliers produce to stock a single product and are allocated demand by the manufacturer based on the amount the amount of inventory they hold. We prove the existence of a Nash equilibrium for a broad class of market allocation schemes. For the special case of identical suppliers under either a stock-proportional or fill rate-proportional allocation, we show the uniqueness of the Nash equilibrium. Analysis of the Nash equilibrium for this case reveals that (a) the manufacturer benefits from competition (in the form of higher fill …