Supply Chain Reliability and the Role of Individual Suppliers
Simeon Hagspiel ()
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Simeon Hagspiel: Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)
No 2016-5, EWI Working Papers from Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)
We study a one-period supply chain problem consisting of numerous suppliers delivering a ho- mogenous good. Individual supply is uncertain and may exhibit dependencies with other suppliers as well as with the stochastic demand. Assuming that reliability of supply represents an economic value for the customer that shall be paid accordingly, we ﬁrst derive an analytical solution for the contribution of an individual supplier to supply chain reliability. Second, applying concepts from cooperative game-theory, we propose a payoﬀ scheme based on marginal contributions that explic- itly accounts for the statistical properties of the problem. A number of desirable properties is thus achieved, including static eﬃciency as well as eﬃcient investment incentives. Lastly, in order to demonstrate the relevance and applicability of the concepts developed, we consider the example of payoﬀs for reliability in power systems that are increasingly enetrated by interdependent variable renewable energies. We investigate empirical data on wind power in Germany, thereby conﬁrming our analytical ﬁndings. In practice, our approach could be applied to design and organize supply chains and their reliability more eﬃciently. For instance, in the ﬁeld of power systems, the approach could improve designs of capacity or renewable support mechanisms.
Keywords: supply chain reliability; capacity uncertainty; individual contribution; cooperative game theory; shapley value; power system (search for similar items in EconPapers)
JEL-codes: C44 C71 D47 Q42 Q48 (search for similar items in EconPapers)
Pages: 31 pages
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ewikln:2016_005
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