The role of e-marketplaces in relationship-based supply chains: a survey
IBM Systems Journal
Capacity allocation with competitive retailers
ICEC '06 Proceedings of the 8th international conference on Electronic commerce: The new e-commerce: innovations for conquering current barriers, obstacles and limitations to conducting successful business on the internet
Comments on "Information Distortion in a Supply Chain: The Bullwhip Effect"
Management Science
A Supply Chain Model with Reverse Information Exchange
Manufacturing & Service Operations Management
A fuzzy goal programming approach with priority for channel allocation problem in steel industry
Expert Systems with Applications: An International Journal
Computers and Operations Research
Altering the Information System for a plywood supply chain in order to tame the Bullwhip effect
International Journal of Intelligent Systems Technologies and Applications
Drivers of Finished-Goods Inventory in the U.S. Automobile Industry
Management Science
Capacity Allocation and Scheduling in Supply Chains
Operations Research
Efficient Funding: Auditing in the Nonprofit Sector
Manufacturing & Service Operations Management
Capacity Allocation over a Long Horizon: The Return on Turn-and-Earn
Manufacturing & Service Operations Management
A study on coordination of capacity allocation for different types of contractual retailers
Decision Support Systems
Dynamic Capacity Allocation to Customers Who Remember Past Service
Management Science
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Consider a supplier selling to multiple retailers. Demand varies across periods, but the supplier's capacity and wholesale price are fixed. If demand is high, the retailers' needs exceed capacity, and the supplier must implement an allocation mechanism to dole out production. We examine how the choice of mechanism impacts retailer actions and supply chain performance. In particular, we analyze turn-and-earn allocation, a method commonly used in the automobile industry. This scheme bases current allocations on past sales and thus enables retailers to influence their future allocations; they compete for scarce capacity even if they do not compete for customers. We show that turn-and-earn induces the retailers to increase their sales when demand is low and the supplier's capacity is otherwise underutilized. Supplier profits thus increase. The impact on the supply chain depends on how restrictive capacity is. With mildly tight capacity, the retailers' higher sales rate does not significantly lower their profits but does reduce the cost of idle capacity. Supply chain performance improves. With extremely tight capacity, the retailers' intense competition dissipates more profits than the supplier gains, and supply chain performance suffers. Consequently, turn-and-earn does not generally coordinate the system. It is best characterized as a means for the supplier to increase her profits at the expense of the retailers and potentially even the supply chain. Furthermore, these results hold even if the retailers can hold inventory in anticipation of scarce capacity.