Travel Circle: A Model of Supply Chains

C. Oscar Lau

MPRA Paper from University Library of Munich, Germany

Abstract: Travel circle is a metaphor for supply chains: in travel circle, travelers are transported by carriers in multiple legs from the center to diverse destinations on the circumference; in supply chains, goods are transformed in multiple stages by firms from natural resources into differentiated products. The model is generated using only three cost parameters. At the start of supply chains, a few firms mass-produce standardized commodities at low unit costs; at the end, many firms produce distinctive products in small scales at high unit costs. As an extension, the circle’s size is endogenized to account for consumers’ preferences for varieties.

Keywords: Product differentiation; Scale economies; Entry game (search for similar items in EconPapers)
JEL-codes: L11 L13 L23 L25 (search for similar items in EconPapers)
Date: 2022-11-06
New Economics Papers: this item is included in nep-com, nep-gth and nep-ind
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https://mpra.ub.uni-muenchen.de/115690/9/MPRA_paper_115690.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:115291

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