IDEAS home Printed from https://ideas.repec.org/a/spr/annopr/v336y2024i3d10.1007_s10479-022-05095-3.html
   My bibliography  Save this article

Radio-frequency Identification (RFID) adoption and chain structure decisions in competing supply chains: Bertrand competition versus Cournot competition

Author

Listed:
  • Li-Hao Zhang

    (Shanghai Maritime University)

  • Shan-Shan Wang

    (Shanghai University of Engineering Science)

  • Lu-Yu Chang

    (Shanghai Maritime University)

Abstract

We investigate the RFID adoption and chain structure (i.e., integrated or decentralized) decisions in two supply chains under two competition modes (i.e., Bertrand or Cournot competition). Each chain consists of a manufacturer and an exclusive retailer, who suffers from inventory misplacement problem. Two supply chains first simultaneously choose chain structure and then decide whether to invest in RFID technology. We develop an analytical model to derive the equilibrium outcomes, then further analyze the interactions between RFID adoption and chain structure under two competition modes. We find that in equilibrium, both chains prefer to choose integration under Cournot competition, while they might be better off from decentralization under Bertrand competition. Moreover, there may exist a prisoner’s dilemma for the equilibrium strategies on RFID adoption and chain structure. Specifically, when both chains adopt RFID, the prisoner’s dilemma occurs if the competition is fierce; when only one chain adopts RFID, the chain who forgoes RFID adoption is easier to trap into the prisoner’s dilemma; when no chain adopts RFID, a high misplacement rate may aggravate the prisoner’s dilemma if the competition is weak, and the supply chain members under Cournot competition may escape such dilemma if the competition is fierce. In addition, competition mode doesn’t affect the optimal strategies for RFID adoption and chain structure. Further, in the case where the manufacturer affords a higher production cost, Cournot competition is more conducive to coordinate chains when competition is weak or relatively fierce, whereas Bertrand competition will be more effective when competition is moderate or very fierce.

Suggested Citation

  • Li-Hao Zhang & Shan-Shan Wang & Lu-Yu Chang, 2024. "Radio-frequency Identification (RFID) adoption and chain structure decisions in competing supply chains: Bertrand competition versus Cournot competition," Annals of Operations Research, Springer, vol. 336(3), pages 1777-1811, May.
    • Handle: RePEc:spr:annopr:v:336:y:2024:i:3:d:10.1007_s10479-022-05095-3
    DOI: 10.1007/s10479-022-05095-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10479-022-05095-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10479-022-05095-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Li-Hao Zhang & Shan-Shan Wang, 2022. "Strategic analysis of RFID adoption sequences in a supply chain with Cournot competition: effects of ordering-timing strategies," Annals of Operations Research, Springer, vol. 315(2), pages 2169-2208, August.
    2. He, Qidong & Wang, Nengmin & Yang, Zhen & He, Zhengwen & Jiang, Bin, 2019. "Competitive collection under channel inconvenience in closed-loop supply chain," European Journal of Operational Research, Elsevier, vol. 275(1), pages 155-166.
    3. Fan, Tijun & Tao, Feng & Deng, Sheng & Li, Shuxia, 2015. "Impact of RFID technology on supply chain decisions with inventory inaccuracies," International Journal of Production Economics, Elsevier, vol. 159(C), pages 117-125.
    4. Chen, Xi & Benjaafar, Saif & Elomri, Adel, 2019. "On the effectiveness of emission penalties in decentralized supply chains," European Journal of Operational Research, Elsevier, vol. 274(3), pages 1155-1167.
    5. Sahin, Evren & Dallery, Yves, 2009. "Assessing the impact of inventory inaccuracies within a Newsvendor framework," European Journal of Operational Research, Elsevier, vol. 197(3), pages 1108-1118, September.
    6. Zhang, Li-Hao & Li, Tian & Fan, Ti-Jun, 2018. "Radio-frequency identification (RFID) adoption with inventory misplacement under retail competition," European Journal of Operational Research, Elsevier, vol. 270(3), pages 1028-1043.
    7. Nicole DeHoratius & Ananth Raman, 2008. "Inventory Record Inaccuracy: An Empirical Analysis," Management Science, INFORMS, vol. 54(4), pages 627-641, April.
    8. Bian, Junsong & Lai, Kin Keung & Hua, Zhongsheng & Zhao, Xuan & Zhou, Guanghui, 2018. "Bertrand vs. Cournot competition in distribution channels with upstream collusion," International Journal of Production Economics, Elsevier, vol. 204(C), pages 278-289.
    9. Rekik, Yacine & Syntetos, Aris & Jemai, Zied, 2015. "An e-retailing supply chain subject to inventory inaccuracies," International Journal of Production Economics, Elsevier, vol. 167(C), pages 139-155.
    10. Basak, Debasmita, 2017. "Cournot vs. Bertrand under centralised bargaining," Economics Letters, Elsevier, vol. 154(C), pages 124-127.
    11. Veldman, Jasper & Gaalman, Gerard J.C., 2015. "Competitive investments in cost reducing process improvement: The role of managerial incentives and spillover learning," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 701-709.
    12. Huang, Qinghua & Yang, Shilei & Shi, Victor & Zhang, Yibin, 2018. "Strategic decentralization under sequential channel structure and quality choices," International Journal of Production Economics, Elsevier, vol. 206(C), pages 70-78.
    13. Xu, Jinpeng & Jiang, Wei & Feng, Gengzhong & Tian, Jun, 2012. "Comparing improvement strategies for inventory inaccuracy in a two-echelon supply chain," European Journal of Operational Research, Elsevier, vol. 221(1), pages 213-221.
    14. Mohamed Ben-Daya & Elkafi Hassini & Zied Bahroun, 2019. "Internet of things and supply chain management: a literature review," International Journal of Production Research, Taylor & Francis Journals, vol. 57(15-16), pages 4719-4742, August.
    15. Rekik, Yacine, 2011. "Inventory inaccuracies in the wholesale supply chain," International Journal of Production Economics, Elsevier, vol. 133(1), pages 172-181, September.
    16. Albert Y. Ha & Shilu Tong & Hongtao Zhang, 2011. "Sharing Demand Information in Competing Supply Chains with Production Diseconomies," Management Science, INFORMS, vol. 57(3), pages 566-581, March.
    17. Li, Jin & Yang, Shilei & Shi, Victor & Zhai, Senjing, 2020. "Partial vertical centralization in competing supply chains," International Journal of Production Economics, Elsevier, vol. 224(C).
    18. Yacine Rekik & Aris Syntetos & Zied Jemai, 2015. "An e-Retailing Supply Chain Subject to Inventory Inaccuracies," Post-Print hal-02313281, HAL.
    19. Colombo, Luca & Labrecciosa, Paola, 2021. "Dynamic oligopoly pricing with reference-price effects," European Journal of Operational Research, Elsevier, vol. 288(3), pages 1006-1016.
    20. Cannella, Salvatore & Framinan, Jose M. & Bruccoleri, Manfredi & Barbosa-Póvoa, Ana Paula & Relvas, Susana, 2015. "The effect of Inventory Record Inaccuracy in Information Exchange Supply Chains," European Journal of Operational Research, Elsevier, vol. 243(1), pages 120-129.
    21. Cannella, Salvatore & Dominguez, Roberto & Framinan, Jose M., 2017. "Inventory record inaccuracy – The impact of structural complexity and lead time variability," Omega, Elsevier, vol. 68(C), pages 123-138.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li-Hao Zhang & Shan-Shan Wang, 2022. "Strategic analysis of RFID adoption sequences in a supply chain with Cournot competition: effects of ordering-timing strategies," Annals of Operations Research, Springer, vol. 315(2), pages 2169-2208, August.
    2. Akkerman, Fabian & Prak, Dennis & Mes, Martijn, 2025. "Dynamic reordering and inspection for the multi-item Inventory Record Inaccuracy problem," European Journal of Operational Research, Elsevier, vol. 321(2), pages 428-444.
    3. Cannella, Salvatore & Dominguez, Roberto & Framinan, Jose M., 2017. "Inventory record inaccuracy – The impact of structural complexity and lead time variability," Omega, Elsevier, vol. 68(C), pages 123-138.
    4. Wang, Fuqiang & Fang, Xiaoping & Chen, Xiaohong & Li, Xihua, 2016. "Impact of inventory inaccuracies on products with inventory-dependent demand," International Journal of Production Economics, Elsevier, vol. 177(C), pages 118-130.
    5. Lei, Quansheng & Chen, Jian & Wei, Xingyu & Lu, Shan, 2015. "Supply chain coordination under asymmetric production cost information and inventory inaccuracy," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 204-218.
    6. Tao, Feng & Wang, Liang & Fan, Tijun & Yu, Hao, 2022. "RFID adoption strategy in a retailer-dominant supply chain with competing suppliers," European Journal of Operational Research, Elsevier, vol. 302(1), pages 117-129.
    7. Biswal, Arun Kumar & Jenamani, Mamata & Kumar, Sri Krishna, 2018. "Warehouse efficiency improvement using RFID in a humanitarian supply chain: Implications for Indian food security system," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 109(C), pages 205-224.
    8. Dai, Hongyan & Li, Jianbin & Yan, Nina & Zhou, Weihua, 2016. "Bullwhip effect and supply chain costs with low- and high-quality information on inventory shrinkage," European Journal of Operational Research, Elsevier, vol. 250(2), pages 457-469.
    9. Biswal, Arun Kumar & Jenamani, Mamata & Kumar, Sri Krishna, 2020. "The impact of RFID adoption on donor subsidy through for-profit and not-for-profit newsvendor: Implications for Indian Public Distribution system," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).
    10. Yang, Huixiao & Chen, Wenbo, 2020. "Game modes and investment cost locations in radio-frequency identification (RFID) adoption," European Journal of Operational Research, Elsevier, vol. 286(3), pages 883-896.
    11. Feng Tao & Tijun Fan & Kin Keung Lai & Lin Li, 2017. "Impact of RFID technology on inventory control policy," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(2), pages 207-220, February.
    12. Dejian Yu & Zhaoping Yan, 2022. "Combining machine learning and main path analysis to identify research front: from the perspective of science-technology linkage," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(7), pages 4251-4274, July.
    13. Ahmed Musa & Al-Amin Abba Dabo, 2016. "A Review of RFID in Supply Chain Management: 2000–2015," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 17(2), pages 189-228, June.
    14. Shabani, Amir & Maroti, Gabor & de Leeuw, Sander & Dullaert, Wout, 2021. "Inventory record inaccuracy and store-level performance," International Journal of Production Economics, Elsevier, vol. 235(C).
    15. Cannella, Salvatore & Framinan, Jose M. & Bruccoleri, Manfredi & Barbosa-Póvoa, Ana Paula & Relvas, Susana, 2015. "The effect of Inventory Record Inaccuracy in Information Exchange Supply Chains," European Journal of Operational Research, Elsevier, vol. 243(1), pages 120-129.
    16. Reyes, Pedro M. & Li, Suhong & Visich, John K., 2016. "Determinants of RFID adoption stage and perceived benefits," European Journal of Operational Research, Elsevier, vol. 254(3), pages 801-812.
    17. Xu, Jinpeng & Jiang, Wei & Feng, Gengzhong & Tian, Jun, 2012. "Comparing improvement strategies for inventory inaccuracy in a two-echelon supply chain," European Journal of Operational Research, Elsevier, vol. 221(1), pages 213-221.
    18. Li, Ming & Wang, Zheng & Chan, Felix T.S., 2016. "A robust inventory routing policy under inventory inaccuracy and replenishment lead-time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 290-305.
    19. Yu Zhang & Nan Liu, 2021. "Optimal Internet of Things Technology Adoption Decisions and Pricing Strategies for High-Traceability Logistics Services," Sustainability, MDPI, vol. 13(19), pages 1-33, September.
    20. Dai, Hongyan & Ge, Ling & Zhou, Weihua, 2015. "A design method for supply chain traceability systems with aligned interests," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 14-24.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:annopr:v:336:y:2024:i:3:d:10.1007_s10479-022-05095-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.