Pricing and sourcing strategies for competing retailers in supply chains under disruption risk

Kumar, Milan; Basu, Preetam; Avittathur, Balram

doi:10.1016/j.ejor.2017.08.019

Cited by 109 publications

(50 citation statements)

References 39 publications

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“…Huang et al [41] analyzed the price competition of two-level SC including a manufacturer and duopoly retailers under different power structures, and examined the influence of pricing strategy and power structure on SC performance. Kumar et al [42] explored the procurement and pricing of two competing retailers under the risk of supply disruption, and provided management suggestions for retailers. They found that retailers pay more attention to reliable supply under their own advantages.…”

Section: Competitive Behavior In the Supply Chainmentioning

confidence: 99%

Optimal Decisions for Two Risk-Averse Competitive Manufacturers under the Cap-and-Trade Policy and Uncertain Demand

Sun

Yang

Zhong

2020

IJERPH

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With the increasingly serious problem of environmental pollution, reducing carbon emissions has become an urgent task for all countries. The cap-and-trade (C&T) policy has gained international recognition and has been adopted by several countries. In this paper, considering the uncertainty of market demand, we discuss the carbon emission reduction and price policies of two risk-averse competitive manufacturers under the C&T policy. The two manufacturers have two competitive behaviors: simultaneous decision making and sequential decision making. Two models were constructed for these behaviors. The optimal decisions, carbon emission reduction rate, and price were obtained from these two models. Furthermore, in this paper the effects of some key parameters on the optimal decision are discussed, and some managerial insights are obtained. The results show that the lower the manufacturers’ risk aversion level is, the higher their carbon emission reduction rate and utilities. As the carbon quota increases, the manufacturers’ optimal carbon reduction rate and utilities increase. Considering consumers’ environmental awareness, it is more beneficial for the government to reduce the carbon quota and motivate manufacturers’ internal enthusiasm for emission reduction. The government can, through macro control of the market, make carbon trading prices increase appropriately and encourage manufacturers to reduce carbon emissions.

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Section: Competitive Behavior In the Supply Chainmentioning

confidence: 99%

Optimal Decisions for Two Risk-Averse Competitive Manufacturers under the Cap-and-Trade Policy and Uncertain Demand

Sun

Yang

Zhong

2020

IJERPH

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“…To explore the strategic sourcing choice under capacity constraint and asymmetric cost information, Huang et al [22] consider a buyer who procures a critical component from two outside suppliers for the final product. Kumar et al [25] study two competing retailers engaged in competition and determine the cutoff probabilities for optimal sourcing strategies for the retailer. In a co-opetitive supply chain, Niu et al [32] investigate the OEM's sourcing strategy choice and find she always prefers dual sourcing even though one supplier is unreliable.…”

Section: Literature Reviewmentioning

confidence: 99%

Strategic sourcing under recall loss sharing and product quality investment

Dong

Zhou

2020

RAIRO-Oper. Res.

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Product recall has been a widespread practical operation risk in the production outsourcing. To remit even avoid product recall risk, this paper considers a two-echelon supply chain where the original equipment manufacturer (OEM) orders a critical component from one or two contract manufacturers (CMs) and uses it to produce finished product with potential quality defect. The CMs can decide investment level to reduce defect possibility and share recall loss with the OEM once product recall is implemented. When the recall loss sharing rate is fixed, the OEM may adopt the single sourcing strategy or the dual sourcing strategy which depends on the recall loss sharing rate. Moreover, if the sharing rate is relatively small, the single sourcing strategy is an optimal choice for the OEM. However, when the recall loss sharing rate is determined by the OEM, she prefers to adopt the dual sourcing strategy. Meanwhile, an increase of the recall loss sharing rate may not force the CM to improve product quality. By the numerical analysis, if the marginal recall loss is large or the wholesale price is relatively small, the OEM and the CMs can reach a win-win scenario. Finally, we examine an extension in which the CMs have pricing ability on wholesale price, and the result shows that the OEM can not obtain a cost-reduction benefit under the dual sourcing strategy.Mathematics Subject Classification. 91A35, 91A80, 91B06.

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“…A body of literature has been established that examines the impacts of different structural variations on SC performance for various risk attitudes in a decision maker, ranging from risk neutral to risk averse (Ho et al 2015;Rangel, de Oliveira, and Alexandre 2015;Yang and Babich 2015;Snyder et al 2016;Ivanov, Dolgui, et al 2017;Kumar, Basu, and Avittathur 2018;Sawik 2017;Reyes Levalle and Nof 2017;Yoon, Talluri, et al 2018;Carbonara and Pellegrino 2017;Namdar et al 2018). This literature at the structural level targets semantic network analysis in order to identify underlying interdependencies between network graph forms and SC robustness, flexibility, adaptability, and resilience (Basole and Bellamy 2014;Zobel and Khansa 2014;Kim, Chen, and Linderman 2015;Ivanov 2017a;Giannoccaro, Nair, and Choi 2017;Ivanov, Tsipoulanidis, and Schönberger 2017;Ivanov, Pavlov, et al 2017;Dolgui, Ivanov, and Sokolov 2018).…”

Section: Semantic Level: Structural Properties Complexity Role and mentioning

confidence: 99%

“…With regards to both product flexibility and disruption risks, Carbonara and Pellegrino (2017) analysed flexibility strategies to mitigate SC disruption risks. This research is related to that of product substitution under disruptions, mostly with considerations of pricing decisions using game theoretic modelling (Lu, Huang, and Shen 2011;Li, Sethi, and Zhang 2017;Kumar, Basu, and Avittathur 2018). Simchi-Levi, Wang" and Wei (2018) provide evidence that process flexibility and inventory should be considered as important drivers of SC robustness.…”

Section: Product and Process Redundancy: Proactive Stagementioning

confidence: 99%

Low-Certainty-Need (LCN) supply chains: a new perspective in managing disruption risks and resilience

Ivanov

Dolgui

2018

International Journal of Production Research

248

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This study suggests a new approach to supply chain (SC) disruption risk management where SC behaviour is less dependent on the certainty of our knowledge about the environment and its changes. The unpredictability of the occurrence of disruption and its magnitude suggests that designing SCs with a low need for 'certainty' may be as important, if not more so, than predetermined disruption control strategies. In this setting, this study calls for the development of a new perspective in SC disruption management, i.e. low-certainty-need (LCN) SCs. A number of principles and concepts is derived in recent, relevant literature to structure the characteristics of the LCN framework and its management. Structural variety, process flexibility, and parametrical redundancy are identified as key LCN SC characteristics that ensure efficient disruption resistance as well as recovery resource allocation. Two efficiency capabilities of the LCN SC are shown, i.e. low need for uncertainty consideration in planning decisions and low need for recovery coordination efforts based on a combination of lean and resilient elements. The results allow the identification of an LCN SC framework, concepts and technologies for its implementation as well as missing themes and new research questions which contribute to a better understanding of SC disruption risks. Special focus is directed on the digital technology usage in the LCN framework implementation.

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Pricing and sourcing strategies for competing retailers in supply chains under disruption risk

Cited by 109 publications

References 39 publications

Optimal Decisions for Two Risk-Averse Competitive Manufacturers under the Cap-and-Trade Policy and Uncertain Demand

Optimal Decisions for Two Risk-Averse Competitive Manufacturers under the Cap-and-Trade Policy and Uncertain Demand

Strategic sourcing under recall loss sharing and product quality investment

Low-Certainty-Need (LCN) supply chains: a new perspective in managing disruption risks and resilience

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