Information distortion in a supply chain: the bullwhip effect
Management Science - Special issue on frontier research in manufacturing and logistics
Selling to the Newsvendor: An Analysis of Price-Only Contracts
Manufacturing & Service Operations Management
Capacity Games in Assembly Systems with Uncertain Demand
Manufacturing & Service Operations Management
Channel Performance Under Consignment Contract with Revenue Sharing
Management Science
Designing Supply Contracts: Contract Type and Information Asymmetry
Management Science
Competition in Multiechelon Assembly Supply Chains
Management Science
Procuring Fast Delivery: Sole Sourcing with Information Asymmetry
Management Science
Competition, Cooperation, and Information Sharing in a Two-Echelon Assembly System
Manufacturing & Service Operations Management
Inventory Policies in a Decentralized Assembly System
Operations Research
Call Center Outsourcing Contract Analysis and Choice
Management Science
Competition and Cooperation in Decentralized Push and Pull Assembly Systems
Management Science
Coalition Stability in Assembly Models
Operations Research
Incentives for Retailer Forecasting: Rebates vs. Returns
Management Science
Supplier Competition in Decentralized Assembly Systems with Price-Sensitive and Uncertain Demand
Manufacturing & Service Operations Management
| Hi-index | 0.00 |
This paper analyzes decentralized assembly systems under asymmetric demand information and sequential contracting. We reveal new insights on the value of contract type price-only versus complex, demand information complete versus asymmetric, and contract sequence first mover versus second mover to different players. Our results for the basic model show the following: 1 Complex contracts increase the suppliers' aggregate profit; however, individual suppliers do not necessarily benefit from a complex contracting equilibrium. We identify the conditions under which each supplier benefits from such an equilibrium. 2 Eliminating information asymmetry is not always beneficial for the suppliers because obtaining information might bring only marginal value and hence might not be realistically justified. Furthermore, a downstream supplier might prefer information asymmetry to complete information, especially when demand variability is moderate. 3 Unless there is a high demand risk, the first-mover advantage is prevalent when the assembler is a price-taker. We extend our basic model to analyze two additional scenarios. First, we study cases where the suppliers may offer contracts of different complexity. Beyond enriching our understanding of contract choice in decentralized assembly systems, such variations enhance the analysis beyond the standard methodology of principal-agent models and utilize solution techniques from optimal control. Second, we analyze the situation where the suppliers may possess different levels of information on demand under complex contracts. We show that an upstream supplier always benefits from a downstream supplier's superior information. However, the additional information might decrease the downstream supplier's profit, especially when the forecast variability is low compared to the total demand variability in the system. Our results for the basic model and its extensions confirm that studying interactions between suppliers, specifically under different contract types and information structures, in assembly systems presents rich opportunities for future research.