A note on competitive supply chains with generalised supply costs
Document Type
Journal article
Source Publication
European Journal of Operational Research
Publication Date
12-16-2010
Volume
207
Issue
3
First Page
1316
Last Page
1320
Publisher
Elsevier BV
Keywords
Marketing, supply chain outsourcing, channel competition
Abstract
This note generalises models from two influential papers in the theory of supply chain outsourcing under competition: McGuire and Staelin (1983) and Cachon and Harker (2002). The first paper studies the impact of competitive intensity on the outsourcing decision from the supplier's point of view for linear supply cost; the second paper examines the impact of supply economies of scale from the retailer's point of view when selling perfectly substitutable products. By considering competitive intensity and supply economies of scale simultaneously, we find that equilibrium channel structures are primarily determined by the competitive intensity, which is true even under supply diseconomies of scale; the key message in the second paper of scale economies driving retailer's outsourcing supply decision is highly dependent on the assumption of perfect substitutes. Our finding has no qualitative difference when either the suppliers or the retailers are modeled as the channel leader and make the outsourcing decisions.
DOI
10.1016/j.ejor.2010.07.012
Print ISSN
03772217
E-ISSN
18726860
Publisher Statement
Copyright © 2010 Elsevier B.V
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Atkins, D., & Liang, L. (2010). A note on competitive supply chains with generalised supply costs. European Journal of Operational Research, 207(3), 1316-1320. doi: 10.1016/j.ejor.2010.07.012