The effect of forward integration on a single-vendor–multi-retailer supply chain under retailer competition

Establishing long-term relationships among the members of a supply chain has become necessary to enhance the supply chain's competitiveness in a globalized environment. Besides coordinating operational decisions, such as how much and when to produce or to order, the members of a supply chain may also share financial resources or act jointly on the capital market. This is important especially when companies have unequal access to capital, for example because they are located in countries with different economic conditions and banking policies and/or ratings. The joint financing of investments across the supply chain may thus ensure the stability of production and of the flow of products to the customers. In addition, it strengthens the established relationships among the supply chain members. This study takes up these issues and presents an integrated inventory model that considers investments jointly financed by the members of a supply chain. In particular, it considers a two-stage supply chain with a single vendor and a single buyer and assumes that the vendor has the option to invest in increasing its production rate. The buyer, however, is assumed to have better access to capital, and therefore has the option to give a credit to the vendor to invest in its productivity, which is beneficial for both parties. To consider uncertainties of the production improvement investments, a success probability for the investment is considered and modeled using a beta distribution.

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“…3. The demand rate D is assumed to be a linear function of the selling price, (see Banker et al, 1998;Savaskan et al, 2004;Glock and Kim, 2015),…”

Section: Notation and Assumptionsmentioning

confidence: 99%

A joint economic lot size model with financial collaboration and uncertain investment opportunity

Marchi

Ries

Zanoni

et al. 2016

International Journal of Production Economics

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“…There is abundant evidence confirming that the strengths of SI, II and CI are associated with performance in quality, delivery, cost and flexibility (Frohlich and Westbrook, 2001;Flynn et al, 2010;Wong et al, 2011;Malhotra and Mackelprang, 2012;Schoenherr and Swink, 2012;Danese, 2013: Glock andKim, 2015). The influence of SCI on innovation is less understood.…”

Section: Performance Of Different Arcs Of Integrationmentioning

confidence: 99%

Do arcs of integration differ across industries? Methodology extension and empirical evidence from Thailand

Wong

Boon‐itt

2017

International Journal of Production Economics

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This paper verifies the argument that arcs of integration or supply chain integration (SCI) configurations differ across different industries. It further develops statistical methods to compare 'balanced' and 'unbalanced' arcs of integrations and determines performance outcomes of different arcs of integration in three Thai industries. Survey data collected from 151 automotive, 82 electronics and 115 food manufacturers in Thailand are examined using cluster analysis, analysis of variance (ANOVA) and novel approaches to statistically differentiate balanced and unbalanced SCI configurations and their performance implications. The analyses conclude the existence of balanced arcs of integration with uniform levels of supplier integration (SI), internal integration (II), and customer integration (CI), as well as unbalanced arcs of integration with an emphasis on CI in the automotive and electronics industries. The food industry has no balanced arc of integration; some food manufacturers emphasize SI and II. These findings confirm differences across industries and add further insights in terms of how arcs of integration with different SCI strengths and emphases could lead to differences in delivery, quality, cost, flexibility, and innovation performance. Based on the data from these Thai industries, the findings from the different industries allow practitioners to benchmark SCI implementation and identify suitable arcs of integration for achieving desirable performance outcomes. In addition to statistically validating the differences amongst the SCI configurations and providing crucial empirical evidence to verify industrial differences, the paper demonstrates the benefit of analysing SCI configurations based on separate industrial samples and provides empirical evidence to drive new theoretical development.

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“…The two retailers then compete with each other in advertising and have different sales costs. Glock et al [15] study a single-vendor-multi-retailer supply chain and consider the case in which the vendor merges with one of its retailers. After the merger, the vendor supplies products to the market through both a direct (integrated) sales channel and the remaining retailers.…”

Section: Literature Reviewmentioning

confidence: 99%

Contract designing for a supply chain with uncertain information based on confidence level

Liu

Zhao

Liu

et al. 2017

Applied Soft Computing

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The effect of forward integration on a single-vendor–multi-retailer supply chain under retailer competition

Cited by 56 publications

References 34 publications

A joint economic lot size model with financial collaboration and uncertain investment opportunity

A joint economic lot size model with financial collaboration and uncertain investment opportunity

Do arcs of integration differ across industries? Methodology extension and empirical evidence from Thailand

Contract designing for a supply chain with uncertain information based on confidence level

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