Information transformation in a supply chain: a simulation study
Computers and Operations Research
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 fuzzy goal programming approach with priority for channel allocation problem in steel industry
Expert Systems with Applications: An International Journal
A Fuzzy agent-based model for reduction of bullwhip effect in supply chain systems
Expert Systems with Applications: An International Journal
Computers and Operations Research
Mechanism design for capacity allocation with price competition
Proceedings of the 10th international conference on Electronic commerce
A study on coordination of capacity allocation for different types of contractual retailers
Decision Support Systems
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We consider a simple supply chain in which a single supplier sells to several downstream retailers. The supplier has limited capacity, and retailers are privately informed of their optimal stocking levels. If retailer orders exceed available capacity, the supplier allocates capacity using a publicly known allocation mechanism, a mapping from retailer orders to capacity assignments. We show that a broad class of mechanisms are prone to manipulation: Retailers will order more than they need to gain a more favorable allocation. Another class of mechanisms induces the retailers to order exactly their needs, thereby revealing their private information. However, there does not exist a truth-inducing mechanism that maximizes total retailer profits. We also consider the supplier's capacity choice. We show that a manipulable mechanism may lead the supplier to choose a higher level of capacity than she would under a truth-inducing mechanism. Nevertheless, her choice will appear excessively restrictive relative to the prevailing distribution of orders. Furthermore, switching to a truth-inducing mechanism can lower profits for the supplier, the supply chain, and even her retailers. Hence, truth-telling is not a universally desirable goal.