Analysis of Asymmetric Quantity Commitment in Decentralized Supply Chains

Zhaoqiong Qin, Wen-Chyuan Chiang and Robert Russell
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Zhaoqiong Qin: Savannah State University, USA
Wen-Chyuan Chiang: University of Tulsa, USA
Robert Russell: University of Tulsa, USA

International Journal of Operations Research and Information Systems (IJORIS), 2021, vol. 12, issue 2, 83-102

Abstract: Quantity commitment chosen by firms in competition has been demonstrated by previous studies to mitigate price competition. This study demonstrates that asymmetric quantity commitment can always arise when one firm (e-tailer) shortens lead times or adopts just-in-time systems to circumvent quantity commitment while another firm (retailer) does not. To study the asymmetric quantity commitment in decentralization, a multi-stage game is analyzed, and backward induction is adopted. The authors find that the retailer always adopts the quantity commitment in the decentralization to achieve a higher profit.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:igg:joris0:v:12:y:2021:i:2:p:83-102

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