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 control in a decentralised two-stage make-to-stock queueing system
International Journal of Systems Science - Production Coordination and Inventory Policies
Robust models for manufacturing capacity planning underdemand uncertainty
CASE'09 Proceedings of the fifth annual IEEE international conference on Automation science and engineering
Efficient Distribution of Water Between Head-Reach and Tail-End Farms in Developing Countries
Manufacturing & Service Operations Management
A Supply Network's Optimal Information System and Material Flows
International Journal of Information Systems and Supply Chain Management
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We model an isolated portion of a competitive supply chain as aM/M/1 make-to-stock queue. The retailer carries finished goods inventory to service a Poisson demand process, and specifies a policy for replenishing his inventory from an upstream supplier. The supplier chooses the service rate, i.e., the capacity of his manufacturing facility, which behaves as a single-server queue with exponential service times. Demand is backlogged and both agents share the backorder cost. In addition, a linear inventory holding cost is charged to the retailer, and a linear cost for building production capacity is incurred by the supplier. The inventory level, demand rate, and cost parameters are common knowledge to both agents. Under the continuous-state approximation where theM/M/1 queue has an exponential rather than geometric steady-state distribution, we characterize the optimal centralized and Nash solutions, and show that a contract with linear transfer payments replicates a cost-sharing agreement and coordinates the system. We also compare the total system costs, the agents' decision variables, and the customer service levels of the centralized versus Nash versus Stackelberg solutions.