Supply chain coordination under discrete information asymmetries and quantity discounts

Zissis, Dimitris, Ioannou, George and Burnetas, Apostolos (2015) Supply chain coordination under discrete information asymmetries and quantity discounts. Omega (United Kingdom), 53. pp. 21-29. ISSN 0305-0483

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Abstract

We consider a two node supply chain with a rational manufacturer-retailer pair, in which the retailer has private information that affects the nodes' reservation levels. Quantity discounts offered by the manufacturer is the mechanism we propose in order to achieve reduced costs for both supply chain nodes. We derive analytical expressions of the quantity discounts that minimize the manufacturer's costs, while enabling the establishment of the business. Furthermore, we show that perfect coordination is possible even under asymmetric information. Sensitivity analysis and numerical examples offer evidence of the robustness of the results and of the potential of the approach for applications to real-life business ventures.

Item Type: Article
Uncontrolled Keywords: discrete asymmetric information,game theory,quantity discount,reservation level,supply chain management,strategy and management,management science and operations research,information systems and management ,/dk/atira/pure/subjectarea/asjc/1400/1408
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Depositing User: LivePure Connector
Date Deposited: 24 Sep 2019 09:31
Last Modified: 22 Apr 2020 08:12
URI: https://ueaeprints.uea.ac.uk/id/eprint/72353
DOI: 10.1016/j.omega.2014.11.007

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