Duration of Collaboration from a Market Perspective: An Agent-based Modeling Approach

Abstract

Maintaining a long-term partnership with a supplier is considered an effective strategy to achieve collaboration success in supply chain management (SCM). However, individual companies find that this approach does not always improve business performance. In this paper, an agent-based model (ABM) is developed to investigate the effect of duration of collaboration on supply chains from a market perspective. The model represents two-stage supply chains of an innovative product market, involving suppliers and manufacturers. The model outputs are measured by the rate of demand fulfilment and the number of supply chains which can survive in the market. The results show that duration of collaboration has no significant impact on both demand fulfilment and survivability of supply chains. This finding contradicts the common belief held in the literature about the benefits of longterm collaboration, but it corroborates examples encountered in practice. This study provides new insights to the practice of supply chain collaboration by taking a market perspective. The results show that a longer duration of collaboration does not provide a significant improvement to the supply chain's competitiveness from a market point of view, in terms of demand fulfilment and supply chain's ability to survive over the long-term. The implications of this finding to practice are discussed in the paper.

Agent-based modeling and simulation to assess flood preparedness and recovery of manufacturing small and medium-sized enterprises

“…In addition, ABMs have been utilised to evaluate flood communication strategies on individuals (Haer, Botzen, & Aerts, 2016), analyse the influence of individual behaviour on community flood risk (Tonn & Guikema, 2017), investigate the role of individuals' use of social media in relation to flood evacuation (Du, Cai, Sun, & Minsker, 2017), assess individual household flood response preferences (Yang, Scheffran, Süsser, Dawson, & Chen, 2018) and examine the dynamic evolution of flood risk and vulnerability of homeowners (Dubbelboer, J., Nikolic, J., Jenkins, K., Hall, 2017;Jenkins, Surminski, Hall, & Crick, 2017) In terms of modeling businesses, a recent survey of the use of agent-based simulation in management and organizational studies revealed the highest number of applications being in the areas of operations and logistics, marketing and organizational behaviour (Gómez-Cruz, Loaiza Saa, & Ortega Hurtado, 2017). Beyond the areas reported in this survey, agent-based approaches have been used to study business related issues such as the dynamic formation of supply chains (Wang, Wang, Vogel, Kumar, & Chiu, 2009), cost collaborative management in supply chains (Fu & Fu, 2015) and the collaboration duration of supply chains (Arvitrida, Tako, Robertson, & Robinson, 2017).…”

Pharmaceutical Supply Chain Sustainability under the Torchlight of Social Media

“…Collaboration among suppliers, manufactures and customers with the eventual goal of achieving customers' satisfaction is a critical factor (Arvitrida et al, 2017). Integration and collaboration and the culture of interaction throughout the supply chain results in higher amounts of information exchange between the parties.…”

Evaluating the operational resilience of small and medium-sized enterprises to flooding using a computational modelling and simulation approach: a case study of the 2007 flood in Tewkesbury

“…In relation to flooding, applications of agent-based models include flood evacuation simulation [37], risk-based flood incident management [38], flood risk and insurance [39], flood risk communication strategies [40], surface water flood risk and management strategies [41], evolving community flood risk [42], social media and individual behaviours in flood evacuation processes [43] and flood loss assessment with household responses [44]. In the context of SMEs, agent-based models have been used in applications such as dynamic re-scheduling [45], mechatronic supply chains [46], public policy impact [47], community impact on resilience [48], cost collaborative management in supply chains [49], collaboration duration on supply chains [50] and dynamic supply chain formation [51]. Given the widespread use and applicability of agent-based modelling and simulation, in this research, it has been selected to be coupled with flood modelling and simulation to facilitate evaluations of structural and procedural mitigation measures that may be implemented by SMEs in order to become more resilient to extreme inundation events.…”