{"title":"Online Appendix for 'Encroachment as an Enhancement or a Hindrance to Nonlinear Pricing'","authors":"Z. Li, S. Gilbert, Guoming Lai","doi":"10.2139/ssrn.2403615","DOIUrl":"https://doi.org/10.2139/ssrn.2403615","url":null,"abstract":"In section E.C.1, we show that the optimal separating solution always dominates the optimal pooling solution in our model. In section E.C.2, we present two extensions of our base model. In EC.2.1, we extend our model to a setting with a continuously distributed market size. We allow for the possibility that the development of encroachment capability allows the supplier to receive demand information through her direct channel in EC.2.2.The paper \"Supplier Encroachment as an Enhancement or a Hindrance to Nonlinear Pricing\" to which these Appendices apply is available at the following URL:http://ssrn.com/abstract=2118161","PeriodicalId":330843,"journal":{"name":"PROD: Analytical (Supply) (Topic)","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124553409","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Xiaole Wu, P. Kouvelis, Hirofumi Matsuo, Hiroki Sano
{"title":"Horizontal Coordinating Contracts in the Semiconductor Industry","authors":"Xiaole Wu, P. Kouvelis, Hirofumi Matsuo, Hiroki Sano","doi":"10.2139/ssrn.2397077","DOIUrl":"https://doi.org/10.2139/ssrn.2397077","url":null,"abstract":"Integrated device manufacturers (IDMs) and foundries are two types of manufacturers in the semiconductor industry. IDMs integrate both design and manufacturing functions whereas foundries solely focus on manufacturing. Since foundries often have cost advantage over IDMs due to their specialization and economies of scale, IDMs have incentives to source from foundries for the purpose of avoiding excessive capacity investment risk. As the IDM is also a potential capacity source, the IDM and foundry are in a horizontal setting rather than a purely vertical setting. In the absence of sophisticated contracts, the benchmark contract for the IDM and foundry is a wholesale price contract. We define “coordinating” contracts as those that improve both the IDM’s and foundry’s expected profits over the benchmark wholesale price contract and also lead to the maximum system profit. This paper examines if there exist coordinating capacity reservation contracts. It is found that wholesale price contracts in the horizontal setting cannot achieve the maximum system profit due to either double marginalization effect, or “misalignment of capacity-usage-priority”. In contrast, if the IDM’s capacity investment risk is not too low, there always exist coordinating capacity reservation contracts. Furthermore, under coordinating contracts, the IDM’s sourcing structure, either sole sourcing from the foundry or dual sourcing, is contingent on the firms’ cost structures.","PeriodicalId":330843,"journal":{"name":"PROD: Analytical (Supply) (Topic)","volume":"544 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123094805","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Strategic Role of Third-Party Marketplaces in Retailing","authors":"B. Mantin, H. Krishnan, Tirtha Dhar","doi":"10.2139/ssrn.2281276","DOIUrl":"https://doi.org/10.2139/ssrn.2281276","url":null,"abstract":"Retailers are increasingly adopting a dual-format model. In addition to acting as traditional merchants (buying and then reselling goods), these retailers also provide a platform for third-party sellers to access and compete for the same customers. In this paper we investigate the strategic rationale for a retailer to introduce a third-party (3P) marketplace, by addressing the following questions: how does the existence of the 3P marketplace alter the outcome of the bargaining game between a manufacturer and the retailer and how does it affect their profits? Our analysis provides insights into the growing prevalence of 3P marketplaces. We show that by committing to having an active 3P marketplace the retailer creates an \"outside option\" that improves its bargaining position in negotiations with the manufacturer. This can explain the increasing prevalence of such marketplaces. On the other hand, the manufacturer would prefer to eliminate this retailer's outside option and should seek to limit or prevent sales through 3P marketplaces. This is consistent with actions that several manufacturers have taken to limit such sales. Interestingly, if the manufacturer fails to eliminate sales of competing products through the 3P marketplace, then the best strategy for the manufacturer is to allow the retailer to dictate the terms of their contract. This is due to the fact that an all-powerful retailer will rely less on its outside option in generating profit, and therefore it will increase the fees charged to 3P sellers and soften the competition between 3P sellers and the manufacturer. The decrease in competition will lead to an increase in the value of outside option of the manufacturer and improve its profit. Additionally, we find that the presence of a 3P marketplace benefits consumers (due to the introduction of downstream competition), but this benefit diminishes as the retailer is becoming more powerful.","PeriodicalId":330843,"journal":{"name":"PROD: Analytical (Supply) (Topic)","volume":"76 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116339603","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Maximum Principle for Global Solutions of Stochastic Stackelberg Differential Games","authors":"A. Bensoussan, Shaokuan Chen, S. Sethi","doi":"10.2139/ssrn.2413990","DOIUrl":"https://doi.org/10.2139/ssrn.2413990","url":null,"abstract":"For stochastic Stackelberg differential games played by a leader and a follower, there are several solution concepts in terms of the players' information sets. In this paper we derive the maximum principle for the leader's global Stackelberg solution under the adapted closed-loop memoryless information structure, where the term global signifies the leader's domination over the entire game duration. As special cases, we study linear quadratic Stackelberg games under both adapted open-loop and adapted closed-loop memoryless information structures, as well as the resulting Riccati equations.","PeriodicalId":330843,"journal":{"name":"PROD: Analytical (Supply) (Topic)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130877355","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Simulation Conceptual Modelling for SCM Applications: Research Issues and Existing Practice","authors":"Miles W. Weaver","doi":"10.2139/ssrn.2241383","DOIUrl":"https://doi.org/10.2139/ssrn.2241383","url":null,"abstract":"Evaluating supply chain problems is important yet complex; with vast amount of research and practice using a simulation based approach. However, the least understood aspect of a simulation study is the critical step of ‘conceptual modelling’. This paper argues for a conceptual modelling procedure that embeds domain-specific knowledge (i.e. SCOR for SCM applications) and incorporates existing simulation practice applicable at the conceptual modelling stage. Conceptual modelling approaches are reviewed for SCM applications, identifying that no domain-specific guidelines have been provided in the literature. It is argued that developing both comprehensive and focused methodologies would be useful in improving the rigour of supply chain simulation studies and have practical implications. The contribution builds upon Robinson (2008) seminal paper that called for further research on conceptual modelling definitions, requirements and approaches.","PeriodicalId":330843,"journal":{"name":"PROD: Analytical (Supply) (Topic)","volume":"427 2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-08-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116568747","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A Dynamic Inventory Model with the Right of Refusal","authors":"S. Bhaskaran, Karthik Ramachandran, J. Semple","doi":"10.1287/mnsc.1100.1257","DOIUrl":"https://doi.org/10.1287/mnsc.1100.1257","url":null,"abstract":"We consider a dynamic inventory (production) model with general convex order (production) costs and excess demand that can be accepted or refused by the firm. Excess demand that is accepted is backlogged and results in a backlog cost whereas demand that is refused results in a lost sales charge. Endogenizing the sales decision is appropriate in the presence of general convex order costs so that the firm is not forced to backlog a unit whose subsequent satisfaction would reduce total profits. In each period, the firm must determine the optimal order and sales strategy. We show that the optimal policy is characterized by an optimal buy-up-to level that increases with the initial inventory level and an order quantity that decreases with the initial inventory level. More importantly, we show the optimal sales strategy is characterized by a critical threshold, a backlog limit, that dictates when to stop selling. This threshold is independent of the initial inventory level and the amount purchased. We investigate various properties of this new policy. As demand stochastically increases, the amount purchased increases but the amount backlogged decreases, reflecting a shift in the way excess demand is managed. We develop two regularity conditions, one that ensures some backlogs are allowed in each period, and another that ensures the amount backlogged is nondecreasing in the length of the planning horizon. We illustrate the buy-up-to levels in our model are bounded above by buy-up-to levels from the pure lost sales and pure backlogging models. We explore additional extensions using numerical experiments.","PeriodicalId":330843,"journal":{"name":"PROD: Analytical (Supply) (Topic)","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114770997","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Coordination Mechanism for the Supply Chain with Leadtime Consideration and Price-Dependent Demand","authors":"Haoya Chen, Y. Chen, C. Chiu, T. Choi, S. Sethi","doi":"10.1016/j.ejor.2009.07.002","DOIUrl":"https://doi.org/10.1016/j.ejor.2009.07.002","url":null,"abstract":"","PeriodicalId":330843,"journal":{"name":"PROD: Analytical (Supply) (Topic)","volume":"119 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120334518","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Modeling of Supply Chain Risk under Disruptions with Performance Measurement and Robustness Analysis","authors":"Q. Qiang, A. Nagurney, June Dong","doi":"10.1007/978-1-84882-634-2_6","DOIUrl":"https://doi.org/10.1007/978-1-84882-634-2_6","url":null,"abstract":"","PeriodicalId":330843,"journal":{"name":"PROD: Analytical (Supply) (Topic)","volume":"77 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114779187","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"When is Vendor Managed Inventory Good for the Retailer? Impact of Relative Margins and Substitution Rates","authors":"Santiago Kraiselburd","doi":"10.2139/ssrn.1015571","DOIUrl":"https://doi.org/10.2139/ssrn.1015571","url":null,"abstract":"When customers cannot find a particular item at a retailer because it is out of stock, they are likely, with some probability, to switch to a substitute product from another manufacturer at the same store. Analyzing a two-product full substitution case, this paper examines two beliefs argued in the literature: (1) that, under Vendor Managed Inventory (VMI), the retailers would benefit because manufacturers would increase stocking quantities to avoid losing sales to a competitor and (2) that substitution benefits retailers who make a sale regardless. We find that the first proposition, while appealing, is simply not true for many cases. We also find that the second proposition does not hold for a wide number of cases. We contribute to the understanding of the inherent tradeoffs involved in deciding to use RMI or VMI in the presence of competing, substitute products.","PeriodicalId":330843,"journal":{"name":"PROD: Analytical (Supply) (Topic)","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115043339","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}