Centralization of Stocks: Retailers Vs. Manufacturer
Management Science
A General Framework for the Study of Decentralized Distribution Systems
Manufacturing & Service Operations Management
A Two-Location Inventory Model with Transshipment and Local Decision Making
Management Science
A Three-Stage Model for a Decentralized Distribution System of Retailers
Operations Research
Who Benefits from Transshipment? Exogenous vs. Endogenous Wholesale Prices
Management Science
Inventory Sharing and Rationing in Decentralized Dealer Networks
Management Science
Optimal Policies for Transshipping Inventory in a Retail Network
Management Science
Transshipment and Its Impact on Supply Chain Members' Performance
Management Science
Customer-Driven vs. Retailer-Driven Search: Channel Performance and Implications
Manufacturing & Service Operations Management
Transshipment of Inventories: Dual Allocations vs. Transshipment Prices
Manufacturing & Service Operations Management
TECHNICAL NOTE---Decentralized Inventory Sharing with Asymmetric Information
Operations Research
In-Season Transshipments Among Competitive Retailers
Manufacturing & Service Operations Management
Hi-index | 0.00 |
We examine transshipment incentives in a decentralized supply chain where a monopolist distributes a product through independent retailers. A key insight is that the transshipment price determines whether the firms benefit from, or are hurt by, transshipment. In particular, we show that the manufacturer prefers to set the transshipment price as high as possible, whereas retailers prefer a lower transshipment price. Given the important role of the transshipment price in determining the benefits that each firm gets from transshipment, it is useful to consider transshipment in the case where retailers are under joint ownership (a “chain store”) and the transshipment price does not play a role. This comparison yields two surprising results. First, if decentralized retailers control the transshipment price, they will choose a relatively low transshipment price as a way to mitigate the manufacturer's ability to extract profits by increasing wholesale prices; therefore, the manufacturer may prefer dealing with the chain store, which does not have a transshipment price, rather than with decentralized retailers. Similarly, the decentralized retailers can use a low transshipment price to achieve higher total profits than a chain store.