A cooperative options-based strategy for coordinating supply chain and resource allocation decisions

Daniel R. Ball and Abhijit Deshmukh

International Journal of Management and Decision Making, 2013, vol. 12, issue 3, 259-285

Abstract: The current global economic conditions have resulted in an increased awareness of the need for organisations to cooperate, effectively manage resources, and create sustainable value in the production and delivery of goods and services. This paper considers a multi-agent system exhibiting multiple sources of uncertainty and presents a new model that facilitates the strategic allocation of tasks to resources within supply chains, benefits each agent, and hedges systemic risks through cooperative real options and an allocation incentive (or disincentive) pricing scheme. The results are a conceptual model and decision policies that encourage cooperative actions between buyers and suppliers/sellers/producers to most effectively manage supply chain decisions at both macro (organisations/echelons) and micro (departments) levels. This new model may help supply chain members jointly design flexible contracts that respond dynamically as system information and uncertainties become better known, improve coordination, reduce costs, and minimise the bullwhip effect within large-scale supply chain networks.

Keywords: cooperative decision making; real options; supply chain management; SCM; resource allocation; multi-agent systems; MAS; strategic options; decision making; supply chain coordination; agent-based systems; incentive pricing; conceptual modelling; supply networks; flexible contracts; bullwhip effect. (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (3)

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