Buyer–Supplier Interactions

Chen, Kay‐Yut; Wu, Diana Yan

doi:10.1002/9781119138341.ch13

Cited by 14 publications

(6 citation statements)

References 51 publications

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“…induce order quantities that exhibit a "pull-to-center" effect in which observed average order quantities are regularly between the expected profit-maximizing quantities and mean demand. The effect is highly robust and extends to buyback and revenue-sharing contracts; Becker-Peth and Thonemann (2018) and Chen and Wu (2018) survey this large literature. Few of these studies are concerned with service-level contracts.…”

Section: Introductionmentioning

confidence: 92%

Decision making under service‐level contracts: The role of cost saliency

Bolton

Bonzelet

Stangl

et al. 2023

Production and Operations Management

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This study examines human ordering behavior in service-level inventory contracts, a class of contracts important in practice. Studies of wholesale price contracts find that people tend to place orders that are suboptimal and biased toward mean demand. Unlike wholesale price contracts, service-level contracts can be parameterized such that they have steep expected profit functions, making the expected profit-maximizing order more salient, in the sense that deviations from optimal ordering are more costly. Utilizing an analytical model and results from existing literature, we hypothesize that people will order closer to optimality under service-level contracts with steeper expected profit functions. In a laboratory experiment, we find that subjects achieve up to 97.2% supply chain efficiency under a steep service-level contract, compared with 92.2% under a flat service-level contract, and steep service contract ordering also exhibits lower variability. Our results suggest that managers can benefit by designing service-level contracts with higher penalty costs and lower fill rates.

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Section: Introductionmentioning

confidence: 92%

Decision making under service‐level contracts: The role of cost saliency

Bolton

Bonzelet

Stangl

et al. 2023

Production and Operations Management

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show abstract

“…The behavioral operations management literature has provided a great deal of insight into supply chain contract mechanisms (for detailed reviews, see Becker-Peth and Thonemann 2018, Wu 2018, andDonohue et al 2020). Closely related to our work, Davis et al (2014) examine the impact of the distribution of the inventory risk on the retailer and the supplier, drawing on the theory Cachon (2004) introduced.…”

Section: Literature Reviewmentioning

confidence: 99%

Who Should Bear the Risk? A Theoretical and Behavioral Investigation of After-Sales Service Contracts

2021

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“…The use of the Beer Game, and its ability to provide important lessons, relates not only to systems concepts. The Beer Game has been used for decades to explore managerial behavior and operations management issues (Chen and Samroengraja, 2000; Edali and Yasarcan, 2016; Sterman, 1989a; Sterman, 1989b; Van Ackere et al ., 1993; Strozzi et al ., 2007; Sterman et al ., 2015; Sterman and Dogan, 2015), to exemplify, teach, and explore supply chain concepts like the bullwhip effect (Brauch and Größler, 2022; Chen & Wu, 2019; Croson and Donohue, 2006; Croson et al ., 2014; Gonçalves and Moshtari, 2021; Haines et al ., 2017; Lee et al ., 1997; Lu, 2021; Oliva et al ., 2022; Wu and Katok, 2006; Yang et al ., 2021), to explore educational applications and the use of flight simulators (Goodwin and Franklin Sr., 1994; Li, 2000; Sarkar and Kumar, 2016), to study nonlinear dynamics and chaotic behavior (Mosekilde et al ., 1991; Mosekilde and Laugesen, 2007; Sterman, 1988), and to reproduce computational results and compare modeling approaches (North and Macal, 2009), among several research topics.…”

Section: Future Work and Final Remarksmentioning

confidence: 99%

History of the Beer Game

Martinez‐Moyano

2024

System Dynamics Review

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This article describes the history of the Beer Game. By triangulating information from literature, archival analysis, and interviews with experts in the field, the main changes in the game over its almost 70‐year history are identified. The article discusses three aspects of the game: 1) its structure (phases of its history, stocks and flows, parameters, etc.); 2) the process for playing the game; and 3) the game debrief. The structure of the Beer Game, and the process for running it, have stabilized over the years into what is now a de facto standard approach. Additional work is needed in the game debrief, specifically in the clarification of key insights and messages (depending on the context of the use of the game), in how to communicate such messages to different audiences, and in the development of support materials for its delivery. © 2024 UChicago Argonne, LLC. System Dynamics Review published by John Wiley & Sons Ltd on behalf of System Dynamics Society.

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Buyer–Supplier Interactions

Cited by 14 publications

References 51 publications

Decision making under service‐level contracts: The role of cost saliency

Decision making under service‐level contracts: The role of cost saliency

Who Should Bear the Risk? A Theoretical and Behavioral Investigation of After-Sales Service Contracts

History of the Beer Game

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