Implementation of optimal schedules in outsourcing with identical suppliers

Abstract

This paper deals with decentralized decision-making situations in which firms outsource production orders to multiple identical suppliers. Each firm aims to minimize the sum of its completion times. We study whether a central authority can install a mechanism such that strategic interaction leads to a socially optimal schedule. For the case of single demand the shortest-first mechanism implements optimal schedules in Nash equilibrium. We show that for the general case there exists no anonymous mechanism that implements optimal schedules in correlated equilibrium.

Outsourcing with identical suppliers and shortest-first policy: a laboratory experiment

“…Figure 3 reveals that several groups manage to coordinate on the optimal social costs over time in game AD. For example, in the last ten rounds of this game, a total of 9 groups (groups 1,7,8,12,17,21,24,26,29) reach at least 8 times the optimal social costs via the same play.…”

Fabrication Cycle Time and Shipment Decision for A Multiproduct Intra-Supply Chain System with External Source and Scrap

“…Instead of focusing on a conventional concept in cost savings (i.e., comparing unit outsourcing cost to unit in-house fabrication cost), authors pointed out that by outsourcing to the firm and its retail rival's common supplier, can limit the incentive the supplier offering favorable terms to its rival, thus may lower its rivals' ability to compete. Other studies (Chiu et al, 2017;Mohammadi, 2017;Skowronski et al, 2018;Hamers et al, 2019) explored production systems with diverse features of outsourcing plans. Since past studies paid little attention to the system considering the joint effects of multiproduct, outsourcing, and random scrap, the present study aims to fill the gap.…”