Mathematics of Operations Research
Mathematics of Operations Research
Competitive Markov decision processes
Competitive Markov decision processes
Competitive and Cooperative Inventory Policies in a Two-Stage Supply Chain
Management Science
Decentralized supply chains subject to information delays
Management Science
Quantitative Models for Supply Chain Management
Quantitative Models for Supply Chain Management
A Capacitated Production-Inventory Model with Periodic Demand
Operations Research
Customer Service Competition in Capacitated Systems
Manufacturing & Service Operations Management
Responsibility Tokens in Supply Chain Management
Manufacturing & Service Operations Management
Optimal Policies for a Capacitated Two-Echelon Inventory System
Operations Research
A Decomposition Approach for a Class of Capacitated Serial Systems
Operations Research
Manufacturing & Service Operations Management
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We consider a two-stage serial supply chain with capacity limits, where each installation is operated by managers attempting to minimize their own costs. A multiple-period model is necessitated by the multiple stages, capacity limits, stochastic demand, and the explicit consideration of inventories. With appropriate salvage value functions, a Markov equilibrium policy is found. Intuitive profit dominance allows for existence of a unique equilibrium solution, which is shown to be a modified echelon base-stock policy. This equilibrium policy structure is sustained in the infinite horizon. A numerical study compares the behavior of the decentralized system with the first-best integrated capacitated system. The performance of this decentralized system relative to the integrated system across other parameters can be very good over a broad range of values. This implies that an acceptable system performance may be attained without the imposition of a contract or other coordinating mechanism, which themselves may encounter difficulties in implementation in the form of negotiation, execution, or enforcement of these agreements. We find instances where tighter capacities may actually enhance channel efficiency. We also examine the effect of capacity utilization on the system suboptimality.