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Coordination mechanisms for supply chains under price and service competition

Publication ,  Journal Article
Bernstein, F; Federgruen, A
Published in: Manufacturing and Service Operations Management
June 1, 2007

In a decentralized supply chain, with long-term competition between independent retailers facing random demands and buying from a common supplier, how should wholesale and retail prices be specified in an attempt to maximize supply-chain-wide profits? We show what types of coordination mechanisms allow the decentralized supply chain to generate aggregate expected profits equal to the optimal profits in a centralized system, and how the parameters of these (perfect) coordination schemes can be determined. We assume that the retailers face stochastic demand functions that may depend on all of the firms' prices as well as a measure of their service levels, e.g., the steady-state availability of the products. We systematically compare the coordination mechanisms when retailers compete only in terms of their prices, and when they engage in simultaneous price and service competition. © 2007 INFORMS.

Duke Scholars

Published In

Manufacturing and Service Operations Management

DOI

EISSN

1526-5498

ISSN

1523-4614

Publication Date

June 1, 2007

Volume

9

Issue

3

Start / End Page

242 / 262

Related Subject Headings

  • Operations Research
  • 4901 Applied mathematics
  • 3509 Transportation, logistics and supply chains
  • 1505 Marketing
  • 1503 Business and Management
  • 0102 Applied Mathematics
 

Citation

APA
Chicago
ICMJE
MLA
NLM
Bernstein, F., & Federgruen, A. (2007). Coordination mechanisms for supply chains under price and service competition. Manufacturing and Service Operations Management, 9(3), 242–262. https://doi.org/10.1287/msom.1070.0159
Bernstein, F., and A. Federgruen. “Coordination mechanisms for supply chains under price and service competition.” Manufacturing and Service Operations Management 9, no. 3 (June 1, 2007): 242–62. https://doi.org/10.1287/msom.1070.0159.
Bernstein F, Federgruen A. Coordination mechanisms for supply chains under price and service competition. Manufacturing and Service Operations Management. 2007 Jun 1;9(3):242–62.
Bernstein, F., and A. Federgruen. “Coordination mechanisms for supply chains under price and service competition.” Manufacturing and Service Operations Management, vol. 9, no. 3, June 2007, pp. 242–62. Scopus, doi:10.1287/msom.1070.0159.
Bernstein F, Federgruen A. Coordination mechanisms for supply chains under price and service competition. Manufacturing and Service Operations Management. 2007 Jun 1;9(3):242–262.

Published In

Manufacturing and Service Operations Management

DOI

EISSN

1526-5498

ISSN

1523-4614

Publication Date

June 1, 2007

Volume

9

Issue

3

Start / End Page

242 / 262

Related Subject Headings

  • Operations Research
  • 4901 Applied mathematics
  • 3509 Transportation, logistics and supply chains
  • 1505 Marketing
  • 1503 Business and Management
  • 0102 Applied Mathematics