Trading reserved capacity independently among supply chains
We propose a novel mechanism for pooling the reserved capacity (super capacity) of different supply chains, so that they can more effectively match their single-period inventory supplies with their demands. Through this mechanism, retailers can buy or sell unutilized super capacity independently as a commodity in a sub-industry before and during the selling season, which helps improve supply flexibility and increase the utilization of suppliers' reserved capacity. Our findings provide a new channel coordination strategy for a group of supply chains to hedge against capacity and inventory risks by trading super capacity with their competitors, which yields individual and aggregate benefits.
Year of publication: |
2011
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Authors: | Hung, Yick-Hin ; Li, Leon Y.O. ; Cheng, T.C.E. |
Published in: |
International Journal of Production Economics. - Elsevier, ISSN 0925-5273. - Vol. 133.2011, 1, p. 105-112
|
Publisher: |
Elsevier |
Keywords: | Super capacity Alternative inventory Co-opetition game |
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