Contracting with Multiple Suppliers PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Contracting with Multiple Suppliers PDF full book. Access full book title Contracting with Multiple Suppliers by Aadhaar Chaturvedi. Download full books in PDF and EPUB format.
Author: Aadhaar Chaturvedi
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
We consider a multi-item buyer's make versus buy decision. The buyer sells two substitutable products with uncertain demand. Each product requires a different item, which the buyer procures from two separate suppliers (one for each item) who offer quantity-payment contracts under asymmetric information. The buyer can make one of the items but not both. We compare the buyer's expected profit between buying both the items and making one item (and buying the other), when it can make the item at the same cost as the supplier, as well as gain reactive production capability by making. We find that the buyer's profit when buying both items is higher than for making one item if product substitutability is above a threshold (but not extremely high). This is because the interaction between the suppliers' contracts increases the buyer's informational rents more when buying from both suppliers, as compared to one supplier, as product substitutability increases. On the contrary, in the complete information scenario (and under wholesale price contracts), we find that the buyer will never prefer to buy both the items as compared to making one item, as long as product substitutability is not extremely high. These are novel findings on how interlinked contracts under incomplete information and product substitutability can influence a buyer's make versus buy decision in a counter-intuitive manner. Managerially, these results imply that a multi-product buyer may prefer to keep buying from its supplier even when it can produce the item at the same cost as the supplier.
Author: Aadhaar Chaturvedi
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
We consider a multi-item buyer's make versus buy decision. The buyer sells two substitutable products with uncertain demand. Each product requires a different item, which the buyer procures from two separate suppliers (one for each item) who offer quantity-payment contracts under asymmetric information. The buyer can make one of the items but not both. We compare the buyer's expected profit between buying both the items and making one item (and buying the other), when it can make the item at the same cost as the supplier, as well as gain reactive production capability by making. We find that the buyer's profit when buying both items is higher than for making one item if product substitutability is above a threshold (but not extremely high). This is because the interaction between the suppliers' contracts increases the buyer's informational rents more when buying from both suppliers, as compared to one supplier, as product substitutability increases. On the contrary, in the complete information scenario (and under wholesale price contracts), we find that the buyer will never prefer to buy both the items as compared to making one item, as long as product substitutability is not extremely high. These are novel findings on how interlinked contracts under incomplete information and product substitutability can influence a buyer's make versus buy decision in a counter-intuitive manner. Managerially, these results imply that a multi-product buyer may prefer to keep buying from its supplier even when it can produce the item at the same cost as the supplier.
Author: Guillermo Gallego
Publisher:
ISBN:
Category :
Languages : en
Pages : 25
Get Book Here
Book Description
We study contracts between a single retailer and multiple suppliers of two substitutable products, where suppliers have fixed capacities and present the retailer cost contracts for their supplies. After observing the contracts, the retailer decides how much capacity to purchase from each supplier, to maximize profits from the purchased capacity from the suppliers plus his possessed inventory (endowment). This is modeled as a noncooperative, nonzero-sum game, where suppliers, or principals, move simultaneously as leaders and the retailer, the common agent, is the sole follower. We are interested in the form of the contracts in equilibrium, their effect on the total supply chain profit, and how the profit is split between the suppliers and the retailer. Under mild assumptions, we characterize the set of all equilibrium contracts and discuss all-unit and marginal-unit quantity discounts as special cases. We also show that the supply chain is coordinated in equilibrium with a unique profit split between the retailer and the suppliers. Each supplier's profit is equal to the marginal contribution of her capacity to supply chain profits in equilibrium. The retailer's profit is equal to the total revenue collected from the market minus the payments to the suppliers and the associated sales costs.
Author: Michaela Isabel Höhn
Publisher: Springer Science & Business Media
ISBN: 3642027911
Category : Business & Economics
Languages : en
Pages : 134
Get Book Here
Book Description
Supply relations are often governed by so-called relational contracts. These are informal agreements sustained by the value of future cooperation. Although relational contracts persist in practice, research on these types of contract is only emerging in Operations and Supply Chain Management. This book studies a two-firm supply chain, where repeated transactions via well-established supply contracts and continued quality-improvement efforts are governed by a relational contract. We are able to characterize an optimal relational contract, i.e., to develop policies for supplier and buyer that structure investments in quality and flexibility in a way that no other self-enforcing contract generates higher expected joint surplus. A second goal is to compare the performance of different returns mechanisms in the context of relational contracting (quantity flexibility and buy-back contracts). Industry studies motivate the presented model.
Author: Sridhar Tayur
Publisher: Springer Science & Business Media
ISBN: 1461549493
Category : Business & Economics
Languages : en
Pages : 851
Get Book Here
Book Description
Quantitative models and computer-based tools are essential for making decisions in today's business environment. These tools are of particular importance in the rapidly growing area of supply chain management. This volume is a unified effort to provide a systematic summary of the large variety of new issues being considered, the new set of models being developed, the new techniques for analysis, and the computational methods that have become available recently. The volume's objective is to provide a self-contained, sophisticated research summary - a snapshot at this point of time - in the area of Quantitative Models for Supply Chain Management. While there are some multi-disciplinary aspects of supply chain management not covered here, the Editors and their contributors have captured many important developments in this rapidly expanding field. The 26 chapters can be divided into six categories. Basic Concepts and Technical Material (Chapters 1-6). The chapters in this category focus on introducing basic concepts, providing mathematical background and validating algorithmic tools to solve operational problems in supply chains. Supply Contracts (Chapters 7-10). In this category, the primary focus is on design and evaluation of supply contracts between independent agents in the supply chain. Value of Information (Chapters 11-13). The chapters in this category explicitly model the effect of information on decision-making and on supply chain performance. Managing Product Variety (Chapters 16-19). The chapters in this category analyze the effects of product variety and the different strategies to manage it. International Operations (Chapters 20-22). The three chapters in this category provide an overview of research in the emerging area of International Operations. Conceptual Issues and New Challenges (Chapters 23-27). These chapters outline a variety of frameworks that can be explored and used in future research efforts. This volume can serve as a graduate text, as a reference for researchers and as a guide for further development of this field.
Author: National Research Council
Publisher: National Academies Press
ISBN: 0309173418
Category : Technology & Engineering
Languages : en
Pages : 162
Get Book Here
Book Description
The managed flow of goods and information from raw material to final sale also known as a "supply chain" affects everythingâ€"from the U.S. gross domestic product to where you can buy your jeans. The nature of a company's supply chain has a significant effect on its success or failureâ€"as in the success of Dell Computer's make-to-order system and the failure of General Motor's vertical integration during the 1998 United Auto Workers strike. Supply Chain Integration looks at this crucial component of business at a time when product design, manufacture, and delivery are changing radically and globally. This book explores the benefits of continuously improving the relationship between the firm, its suppliers, and its customers to ensure the highest added value. This book identifies the state-of-the-art developments that contribute to the success of vertical tiers of suppliers and relates these developments to the capabilities that small and medium-sized manufacturers must have to be viable participants in this system. Strategies for attaining these capabilities through manufacturing extension centers and other technical assistance providers at the national, state, and local level are suggested. This book identifies action steps for small and medium-sized manufacturersâ€"the "seed corn" of business start-up and developmentâ€"to improve supply chain management. The book examines supply chain models from consultant firms, universities, manufacturers, and associations. Topics include the roles of suppliers and other supply chain participants, the rise of outsourcing, the importance of information management, the natural tension between buyer and seller, sources of assistance to small and medium-sized firms, and a host of other issues. Supply Chain Integration will be of interest to industry policymakers, economists, researchers, business leaders, and forward-thinking executives.
Author: Marcel Sieke
Publisher: Springer
ISBN: 3658243821
Category : Business & Economics
Languages : en
Pages : 158
Get Book Here
Book Description
In recent years, the design of contracts in supply chains has received significant attention from researchers and practitioners. Companies try to improve their profits by designing efficient contracts that ensure a high availability of the product at a low cost. In this book the author presents a quantitative approach for designing optimal supply chain contracts. Firstly, service level contracts, which are frequently used between a supplier and a manufacturer, are analyzed. For this contract type, optimal contract parameter combinations are identified that lead to a coordinated supply chain. Secondly, an optimal contract selection strategy is developed for a supply chain where a manufacturer can choose among multiple potential buyers. Potential readership includes scholars of supply chain management and management science, graduate students interested in these areas as well as interested practitioners involved in negotiating contracts.
Author: Craig Kanoa Prisby
Publisher:
ISBN:
Category :
Languages : en
Pages : 25
Get Book Here
Book Description
Supply contracts are used to maximize profits in a supply chain by coordinating order quantities between the suppliers and retailers. In traditional supply contracts, retailers use a newsvendor approach to maximize their profits, while the supplier's profits increase linearly as a function of the number of units supplied to retailers. Initially, retailers assume risk in the supply chain because they are facing an unknown demand, and the suppliers assume no risk. This thesis looks at an example from the garment industry where retailers order to replenish stock after a small assortment buy is placed at the start of the finite selling season. The suppliers must place production orders for the entire selling season before the selling season begins. It is clear see that the retailers assume little risk in this model, while the supplier faces significant risk, especially if its forecasting methods are not accurate. The levels of risk that each assumes in this model are reversed when compared to the traditional supply contract model. A method is developed that coordinates the retailer ordering with the supplier's production schedule. It is shown that coordinating the supply chain's ordering will lead to higher profits than the current, uncoordinated model.
Author: Sudhi Seshadri
Publisher: Springer Science & Business Media
ISBN: 0387251839
Category : Business & Economics
Languages : en
Pages : 324
Get Book Here
Book Description
Sourcing Strategy is about sourcing as a long term strategic activity. Myopic purchasing management stops short with describing functional procedures and procedural innovations such as online order processing. The goal of this book is not merely to document sourcing strategy, but to provide the tools to determine it. Therefore, rather than merely describe common sourcing processes, the book takes a normative approach to sourcing strategy. It argues for a rational, complete and integrated process view. It supports its recommendations with logical arguments from an interdisciplinary and analytical approach grounded in microeconomics, law and business strategy. Part 1 of the book explains the economic and business principles that underlie sourcing strategies. It derives policies that guide viable strategies to meet sourcing goals. Part 2 applies these to creative designs for standard sourcing scenarios.
Author: Bonnie Keith
Publisher: Springer
ISBN: 1137552204
Category : Business & Economics
Languages : en
Pages : 452
Get Book Here
Book Description
This book provides a comprehensive overview of each of the sourcing business model. Readers will master the art and science of strategic sourcing by being able to chart a unique path that fits their capacity to apply more the full continuum of strategic sourcing concepts and tools.
Author: United States. General Accounting Office
Publisher:
ISBN:
Category : Government purchasing
Languages : en
Pages : 104
Get Book Here
Book Description
