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Contracting with demand uncertainty under supply chain competition

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  • Xingzheng Ai
  • Jing Chen
  • Jianhua Ma

Abstract

We examine supply chain contracts for two competing supply chains selling a substitutable product, each consisting of one manufacturer and one retailer. Both manufacturers are Stackelberg leaders and the retailers are followers. Manufacturers in two competing supply chains may choose different contracts, either a wholesale price contract in which the retailer’s demand forecasting information is not shared, or a revenue-sharing contract in which the retailer’s demand forecasting information is shared. Under supply chain competition and demand uncertainty, we identify which contract is more advantageous for each supply chain, and under what circumstances. Copyright Springer Science+Business Media, LLC 2012

Suggested Citation

  • Xingzheng Ai & Jing Chen & Jianhua Ma, 2012. "Contracting with demand uncertainty under supply chain competition," Annals of Operations Research, Springer, vol. 201(1), pages 17-38, December.
    • Handle: RePEc:spr:annopr:v:201:y:2012:i:1:p:17-38:10.1007/s10479-012-1227-x
    DOI: 10.1007/s10479-012-1227-x
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    4. Li, Xiaojing & Chen, Jing & Ai, Xingzheng, 2019. "Contract design in a cross-sales supply chain with demand information asymmetry," European Journal of Operational Research, Elsevier, vol. 275(3), pages 939-956.
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    8. Jianhua Ma & Xingzheng Ai & Wen Yang & Yanchun Pan, 2019. "Decentralization versus coordination in competing supply chains under retailers’ extended warranties," Annals of Operations Research, Springer, vol. 275(2), pages 485-510, April.
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    10. Wenyi Du & Yubing Fan & Lina Yan, 2018. "Pricing Strategies for Competitive Water Supply Chains under Different Power Structures: An Application to the South-to-North Water Diversion Project in China," Sustainability, MDPI, vol. 10(8), pages 1-13, August.
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