Capacity Sharing Strategy With Sustainable Revenue-Sharing Contracts

Abstract

This paper develops a duopoly model to analyse capacity sharing strategy and the optimal revenue-sharing contract under a two-part tariff and examines the effects of capacity sharing, cost, and sharing charges in three scenarios. The paper uses the two-part tariff method and adds a more realistic assumption of incremental marginal costs to improve the research on capacity sharing strategies. The results show that capacity constraints affect the sustainable development of firms. A sustainable revenue-sharing contract can create a win-win situation for both firms and promote capacity sharing. Capacity sharing, cost, and the revenue-sharing rate have different impacts in different scenarios; the optimal revenue-sharing rate and fixed fee can be determined to maximise the profits of firms that share capacity. However, capacity sharing may not improve social welfare.

Research on sales and sharing decisions of the equipment supplier under shared manufacturing environment

“…On the one hand, Qin et al (2020a, b), Fang and Wang (2020) and Chen et al (2022) focus on horizontal capacity sharing between two manufacturers, whereas this paper not only focuses on horizontal capacity sharing among multiple manufacturers, but also focuses on vertical capacity sharing between suppliers and manufacturers. On the other hand, Qin et al (2020a, b), Fang and Wang (2020) and Chen et al (2022) mainly analyze the impact of manufacturers sharing capacity on the manufacturer's profit, Chen et al (2022) also analyze whether manufacturers sharing capacity achieves the win-win situation for two manufacturers. However, this paper investigates whether manufacturers sharing capacity realizes the winwin-win situation for the manufacturer, third-party platform and supplier.…”

“…Regarding the study of production capacity sharing in the service supply chain, Existing scholars mainly focus on production capacity sharing mechanisms (Wu and Chang, 2007;Chen et al, 2008Chen et al, , 2020Wu et al, 2009Wu et al, , 2013Wu et al, , 2014Roels and Tang, 2017;Guo and Wu, 2018;Shao, 2021) and the influence of production capacity sharing (Qin et al, 2020a, b;Fang and Wang, 2020;Wei and Zhang, 2021;Chen et al, 2022). Regarding the production capacity sharing mechanism, Wu and Chang (2007) and Wu et al (2009) consider the production capacity sharing relationship among semiconductor manufacturers and study the capacity trading mechanism and production route planning under the capacity constraint.…”

“…Wei and Zhang (2021) take the example of the automotive manufacturers sharing production capacity, study the manufacturer's optimal capacity investment strategy under the no capacity sharing and capacity sharing scenarios and analyze the interaction between the production delay elasticity and capacity sharing. Chen et al (2022) study the capacity sharing strategies and optimal profit-sharing contracts among competing firms under a two-part tariff contract, and analyze the impact of capacity sharing on competing firms. The above literature has mainly studied the capacity sharing mechanism, coordination strategies, and the impact of capacity sharing on manufacturers' profit in the traditional manufacturing environment.…”

“…Regarding the study of production capacity sharing in the service supply chain, Existing scholars mainly focus on production capacity sharing mechanisms (Wu and Chang, 2007; Chen et al ., 2008, 2020; Wu et al ., 2009, 2013, 2014; Roels and Tang, 2017; Guo and Wu, 2018; Shao, 2021) and the influence of production capacity sharing (Qin et al. , 2020a, b; Fang and Wang, 2020; Wei and Zhang, 2021; Chen et al. , 2022).…”

“…In the above literature, this paper is most relevant to Qin et al. (2020a, b), Fang and Wang (2020) and Chen et al. (2022).…”