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Impact of decision sequence on reliability enhancement with supply disruption risks
Institution:1. School of Business Administration, South China University of Technology, Guangzhou 510640, China;2. School of Business, Jiangnan University, Wuxi 214122, China;1. Department of Information Systems, Statistics and Management Science, Box 870226, The University of Alabama, Tuscaloosa, AL 35487, USA;2. Department of Information Technology and Decision Sciences, 1155 Union Circle #311160, University of North Texas, Denton, Texas 76203, USA;1. Vienna University of Economics and Business, Welthandelsplatz 1, Vienna 1020, Austria;2. Technische Universität München, TUM School of Management, Arcisstrasse 21, Munich 80333, Germany;1. School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, 611731, PR China;2. Rowe School of Business, Dalhousie University, Halifax, NS B3H 4R2, Canada;3. Department of Management, University of Bristol, Bristol, BS8 1TZ, UK
Abstract:This paper considers a supply chain that consists of a manufacturer and a supplier who faces disruption risks. We investigate the impact of decision sequence on the supplier’s endogenous reliability enhancement and the firms’ equilibrium pricing strategies. The supply chain reliability achieves a higher level under the supplier–leader game, but this does not always lead to a higher payoff for the supply chain. Each firm prefers to make the decision first, while any decision sequence can become dominant for the supply chain. We also show that the supply chain can achieve coordination via the revenue sharing contract.
Keywords:Decision sequence  Reliability enhancement  Supply disruption risks  Game theory
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