Impacts of Power Structure on Supply Chains with Uncertain Demand

• 成果类型: Article
• 署名作者: Shi, Ruixia; Zhang, Jun; Ru, Jun
• 署名单位: University of Richmond; University of Texas System; University of Texas Dallas; State University of New York (SUNY) System; University at Buffalo, SUNY
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12002
• 发表日期: 2013
• 页码: 1232-1249
• 关键词: Supply chain; power structure; Demand uncertainty; pricing; game theory

摘要

In this study, we use a game-theory-based framework to model power in a supply chain with random and price-dependent demand and examine how power structure and demand models (expected demand and demand shock) affect supply chain members' performance. We demonstrate that whether a firm benefits from its power depends on the expected demand model but not on demand shock model. A firm benefits from its power only for linear but not for constant elasticity expected demand. The impact of power structure on supply chain efficiency depends on the models of both expected demand and demand shock. With additive shock, supply chain efficiency is highest (lowest) when neither firm dominates for linear (constant elasticity) expected demand. With multiplicative shock, the supply chain efficiency is highest with a power retailer (manufacturer) for linear (constant elasticity) expected demand. The manufacturer always benefits from a reduction in demand uncertainty. However, the retailer loses (benefits) from demand uncertainty reduction for linear (constant elasticity) expected demand. With a power retailer, the retail price is always on the higher end for linear expected demand, and the customer service level is the lowest for constant elasticity expected demand. Consequently, consumers do not necessarily benefit from a power retailer.