Equilibrium analysis of supply chain structures under power imbalance

Edirisinghe, N. C. P.; Bichescu, Bogdan C.; Shi, Xiaoran

doi:10.1016/j.ejor.2011.05.008

Cited by 96 publications

(40 citation statements)

References 31 publications

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“…Instead knowing that power also esteems from the ability to give rewards might lead to a change in behavior enhancing cooperation [42]. Power as an analytical tool has the advantage of framing a company within a network of interdependence [43]. The study of the relationships between these network partners is an important step to avoid possible conflicts [18], [44] and malfunctions that may occur during the operational phase of product realization.…”

Section: Discussionmentioning

confidence: 99%

The effect of power and dependency on relationships between partners in supply chain

Essabbar¹,

Zrikem²,

Zolghadri³

et al. 2014

2014 International Conference on Logistics Operations Management

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Power and dependency are regarded as a fundammental issue in supply chains. However, only a few scientific works have studied these concepts in the context of supply chain management. An important challenge, therefore, is to find out what role power and dependence play and how they affect supply chain management. Therefore, the aim of our work is to examine various aspects of power and dependency in supply chain. By enhancing the managers' knowledge about power-dependency, the presented results help companies in their supply strategy development, tactical and operational decision-makings.

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Section: Discussionmentioning

confidence: 99%

The effect of power and dependency on relationships between partners in supply chain

Essabbar¹,

Zrikem²,

Zolghadri³

et al. 2014

2014 International Conference on Logistics Operations Management

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“…(2) Unit wholesale prices charged by the manufacturer to the retailers are the same (Yang and Zhou 2006). (3) Demands are the linear functions of the direct and retail prices (Edirisinghe et al 2011). …”

Section: Model Descriptionmentioning

confidence: 99%

Pricing Decisions in Dual-Channel Supply Chain Including Monopolistic Manufacturer and Duopolistic Retailers: A Game-Theoretic Approach

2016

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Emergence of the Internet as a new distribution channel has led to increasing attention by researchers to dual-channel supply chain in recent years. In this paper, pricing and ordering decisions are investigated on a dual-channel supply chain which consists of monopolistic manufacturer and duopolistic retailers. The market is assumed to be controlled by the manufacturer. Thus, the manufacturer becomes leader and the two retailers act as followers. Due to establishing this new structure, different game-theoretic models including Bertrand, Collusion, and Stackelberg are developed to analyze pricing strategies under the various interactions between the two retailers. Then, the equilibrium decisions are compared under the considered scenarios and valuable managerial insights are presented. We found that the various games do not have any effects on the manufacturer's responses. The retail prices given by the Collusion game are higher than by the other games. In the Collusion model, demands in the retail channel are lower than in the other games. Moreover, the manufacturer and retailers receive respectively the lowest and the highest profits under the Collusion game.

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“…Bichescu and Fry (2009) study the impact of power in supply-chain settings where decision rights are split between a supplier and a retailer. Edirisinghe et al (2011) investigate the implications of channel power on supply chain stability in a setting where multiple suppliers sell substitutable products through a common retailer. However, none of these works explicitly considers the interactions between manufacturers, nor do they address the issue of distribution channel design.…”

Section: Introductionmentioning

confidence: 99%

Equilibrium analysis of distribution channel structures under power imbalance and asymmetric information

Zhou

Wang

2013

International Journal of Production Research

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This paper investigates the problem of channel choice game in two power-imbalanced supply chains consisting of the leader supply chain and the follower supply chain. We assume that there exists symmetric and asymmetric cost information between the two supply chains, and that the two chains as well as the two members in each chain follow the Stackelberg game setting. We analyse four competition scenarios: both chains are decentralised, where individual members of both supply chains maximise their own profits by independently selecting their price policies; both chains are integrated, where manufacturers and retailers coordinate their decisions to maximise supply chain profits; the leader chain is decentralised and the follower integrated; the leader is integrated and the follower decentralised. The primary objective of this paper is to investigate the influence of power imbalance, information asymmetries, and the degree of product substitutability under channel choice equilibrium. We find that, in contrast to earlier literature where all manufacturers share equal or balanced decision-making power, an integrated distribution channel is the dominant strategy for the leader under symmetric and asymmetric information Stackelberg game. As the degree of product substitutability increases, the follower will gradually switch from integrated distribution channel to decentralised distribution channel; the follower can gain from constructing a decentralised distribution channel as the prediction accuracy of the leader increases.

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Equilibrium analysis of supply chain structures under power imbalance

Cited by 96 publications

References 31 publications

The effect of power and dependency on relationships between partners in supply chain

The effect of power and dependency on relationships between partners in supply chain

Pricing Decisions in Dual-Channel Supply Chain Including Monopolistic Manufacturer and Duopolistic Retailers: A Game-Theoretic Approach

Equilibrium analysis of distribution channel structures under power imbalance and asymmetric information

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