Technical Note-Capacity Allocation Under Retail Competition: Uniform and Competitive Allocations

• 成果类型: Article
• 署名作者: Cho, Soo-Haeng; Tang, Christopher S.
• 署名单位: Carnegie Mellon University; University of California System; University of California Los Angeles
• 刊物名称: OPERATIONS RESEARCH
• ISSN/ISSBN: 0030-364X
• DOI: 10.1287/opre.2013.1234
• 发表日期: 2014
• 页码: 72-80
• 关键词: turn-and-earn; supply chain; equilibrium-analysis; division; demand

摘要

When retailers' orders exceed the supplier's available capacity, the supplier allocates his capacity according to some allocation rule. When retailers are local monopolists, uniform allocation eliminates the gaming effect so that each retailer orders her ideal allocation. However, when two retailers engage in Cournot competition under complete information, a recent study has shown that uniform allocation fails to eliminate the gaming effect so that some retailer may inflate her order strategically. By examining a more general situation in which two or more retailers engage in Cournot competition under complete information, we establish exact conditions under which uniform allocation fails to eliminate the gaming effect. These exact conditions enable us to construct a new rule called competitive allocation that can eliminate the gaming effect. Without inflated orders from the retailers, the supplier's profit could be lower under competitive allocation than under uniform allocation when certain restrictive conditions hold. In contrast, competitive allocation generates higher average profits for the retailers and for the supply chain; hence, it reduces the inefficiency of the decentralized supply chain.