Vertical Contracts in a Supply Chain and the Bullwhip Effect

• 成果类型: Article
• 署名作者: Qu, Zhan; Raff, Horst
• 署名单位: University of Gottingen; University of Kiel; University of Kiel
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3630
• 发表日期: 2021
• 页码: 3744-3756
• 关键词: Bullwhip effect; production smoothing; inventory; supply chain; Demand uncertainty

摘要

This paper shows that decentralized supply chains, in which upstream firms use linear wholesale prices, may experience lower upstream production and downstream sales volatility than vertically integrated supply chains and may be less susceptible to the bullwhip effect by which the variance of upstream production exceeds the variance of downstream sales. The reason is that decentralized supply chains exhibit a price effect, whereby upstream producers raise wholesale prices in the case of positive demand shocks and lower wholesale prices in the case of negative demand shocks. Whereas upstream producers benefit from the price effect and, thus, from a dampening of the bullwhip effect, downstream firms may lose, and overall supply chain profit may decrease.