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Title: Impact of structure, market share and information asymmetry on supply contracts for a single supplier multiple buyer network
Authors: Biswas, Indranil
Avittathur, Balram
Chatterjee, Ashis Kumar
Keywords: Asymmetric information
Market share
Supply chain management
Issue Date: 2016
Publisher: SCOPUS
European Journal of Operational Research
Elsevier B.V.
Series/Report no.: 253(3)
Abstract: Market share of buyers and the influence of supply chain structure on the choice of supply contracts have received scant attention in the literature. This paper focuses on this gap and examines a network consisting of one supplier and two buyers under complete and partial decentralization. In the completely decentralized setting both buyers are independent of the supplier. In the partially decentralized setting the supplier and one of the buyers form a vertically integrated entity. Both buyers order from the single supplier and produce similar products to sell in the same market. The supplier charges the buyer through a contract. We investigate the influence of supply chain structure, market-share and asymmetry of information on supplier's choice of contracts. We demonstrate that both linear two-part tariff and quantity discount contract can coordinate the supply chain irrespective of the supply chain structure. By comparing profit levels of supply chain agents across different supply chain structures, we show that if a buyer possesses a minimum threshold market potential, the supplier has an incentive to collude with her. We calculate the cut-off policies for wholesale price and two-part tariff contracts by incorporating the reservation profit level of individual agents. The managerial implications of the analyses and the directions of future research are presented in the conclusion. � 2016 Elsevier B.V. All rights reserved.
Description: Biswas, Indranil, Indian Institute of Management Lucknow, Lucknow, 226013, India; Avittathur, Balram, Indian Institute of Management Calcutta, Calcutta, 700104, India; Chatterjee, Ashis Kumar, Indian Institute of Management Calcutta, Calcutta, 700104, India
ISSN/ISBN - 3772217
DOI - 10.1016/j.ejor.2016.03.014
Appears in Collections:Operations Management

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