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A supply chain generalized network oligopoly model for pharmaceuticals under brand differentiation and perishability

Listed author(s):
  • Masoumi, Amir H.
  • Yu, Min
  • Nagurney, Anna
Registered author(s):

    In this paper, we construct a generalized network oligopoly model with arc multipliers for supply chains of pharmaceutical products using variational inequality theory. The model captures the Cournot competition among the manufacturers who seek to determine their profit-maximizing product flows, which can be perishable, with the consumers differentiating among the products of the firms, whether branded or generic, and the firms taking into consideration the discarding costs. The numerical examples demonstrate that a brand pharmaceutical product may lose its dominant market share as a consequence of patent rights expiration and because of generic competition.

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    Article provided by Elsevier in its journal Transportation Research Part E: Logistics and Transportation Review.

    Volume (Year): 48 (2012)
    Issue (Month): 4 ()
    Pages: 762-780

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    Handle: RePEc:eee:transe:v:48:y:2012:i:4:p:762-780
    DOI: 10.1016/j.tre.2012.01.001
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    1. Nagurney, Anna & Dupuis, Paul & Zhang, Ding, 1994. "A Dynamical Systems Approach for Network Oligopolies and Variational Inequalities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 28(3), pages 263-283, September.
    2. Anna Nagurney, 2010. "Formulation and analysis of horizontal mergers among oligopolistic firms with insights into the merger paradox: a supply chain network perspective," Computational Management Science, Springer, vol. 7(4), pages 377-406, October.
    3. Nagurney, Anna, 2010. "Supply chain network design under profit maximization and oligopolistic competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(3), pages 281-294, May.
    4. Liu, Zugang & Nagurney, Anna, 2011. "Supply chain outsourcing under exchange rate risk and competition," Omega, Elsevier, vol. 39(5), pages 539-549, October.
    5. Anna Nagurney & Min Yu & Qiang Qiang, 2011. "Supply chain network design for critical needs with outsourcing," Papers in Regional Science, Wiley Blackwell, vol. 90(1), pages 123-142, March.
    6. Goyal, S. K. & Giri, B. C., 2001. "Recent trends in modeling of deteriorating inventory," European Journal of Operational Research, Elsevier, vol. 134(1), pages 1-16, October.
    7. Nagurney, Anna & Yu, Min, 2012. "Sustainable fashion supply chain management under oligopolistic competition and brand differentiation," International Journal of Production Economics, Elsevier, vol. 135(2), pages 532-540.
    8. Nagurney, Anna, 1989. "The formulation and solution of large-scale multicommodity equilibrium problems over space and time," European Journal of Operational Research, Elsevier, vol. 42(2), pages 166-177, September.
    9. Tsiakis, Panagiotis & Papageorgiou, Lazaros G., 2008. "Optimal production allocation and distribution supply chain networks," International Journal of Production Economics, Elsevier, vol. 111(2), pages 468-483, February.
    10. Steven N. Wiggins & Robert Maness, 2004. "Price Competition in Pharmaceuticals: The Case of Anti-infectives," Economic Inquiry, Western Economic Association International, vol. 42(2), pages 247-263, April.
    11. Dafermos, Stella & Nagurney, Anna, 1987. "Oligopolistic and competitive behavior of spatially separated markets," Regional Science and Urban Economics, Elsevier, vol. 17(2), pages 245-254.
    12. Sarang Deo & Charles J. Corbett, 2009. "Cournot Competition Under Yield Uncertainty: The Case of the U.S. Influenza Vaccine Market," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 563-576, July.
    13. Yu, Xuan & Li, Cheng & Shi, Yuhua & Yu, Min, 2010. "Pharmaceutical supply chain in China: Current issues and implications for health system reform," Health Policy, Elsevier, vol. 97(1), pages 8-15, September.
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