Supply chains often consist of several tiers, with different numbers of firms competing at each tier. A major determinant of the structure of supply chains is the cost structure associated with the underlying manufacturing process. In this paper, we examine the impact of fixed and variable costs...

We study potential alliance formation among three competing firms with asymmetric capacity: One large firm has ample capacity, and two small firms have limited capacity. Each firm can either operate independently or form an alliance with another firm. Due to antitrust laws, an alliance of all...