Impact of decision sequence on reliability enhancement with supply disruption risks

Guo Li, Lijun Zhang, Xu Guan and Junjun Zheng

Transportation Research Part E: Logistics and Transportation Review, 2016, vol. 90, issue C, 25-38

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 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (16)

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DOI: 10.1016/j.tre.2015.09.008

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