Wage-Dependent Labor and Supply Chain Networks

Anna Nagurney
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Anna Nagurney: University of Massachusetts

Chapter Chapter 6 in Labor and Supply Chain Networks, 2022, pp 121-147 from Springer

Abstract: Abstract Disruptions to labor in the past few very challenging years have highlighted its importance. Many companies are now increasing wages in order to attract workers. In this chapter, a computable supply chain network framework is presented that includes labor as a resource, along with (hourly) wages that should be paid. Both a single firm and multiple firms are considered with the latter engaged in competition with respect to substitutable products. Variational inequality formulations for the models without wage ceilings and with wage ceilings are given, along with a computational procedure. Supply chain numerical examples demonstrate the impacts of the addition of electronic commerce: the use of outsourcing, and competition, along with increases, as well as the tightening, of wage ceilings on supply chain network links. The general, flexible, holistic framework reveals some unexpected results and also shows the benefits, in terms of profits, of the free market, with no imposed wage upper bounds.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spochp:978-3-031-20855-3_6

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DOI: 10.1007/978-3-031-20855-3_6

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