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Modelling the procurement process and production disruption of a multilayer cruise supply chain

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  • Chenrui Qu
  • Grace W.Y. Wang
  • Qingcheng Zeng

Abstract

The cruise service supply chain is integrated with cruise lines and cruise ship service suppliers to provide the seamless transition and to enhance the best possible customer experiences. Due to the short resupply window for the cruise ship and possible conflicts of self-interests with suppliers, it is crucial for cruise lines to establish the long-term reliable relationships with service providers. However, disruptions caused by weather issues or inaccurate estimations of onboard consumption are rather common. We study a cruise supply chain with customized contingent plans to investigate how effective incentive mechanisms work to create a win-win situation. Game theory is applied to model a cruise supply chain with the consideration of possible adverse selection and moral hazard. Customized incentive mechanisms are further developed for various suppliers with unique industry features. Results show that initial order quantity of onboard supplies only depends on the reliability of high-flexible suppliers and onboard consumption patterns. If the natural disasters affect the reliability of highly flexible suppliers, the cruise line could increase the wholesale price to create a competitive local market. Seasonal contracts are highly recommended to cruise lines with the consideration of various supply categories.

Suggested Citation

  • Chenrui Qu & Grace W.Y. Wang & Qingcheng Zeng, 2020. "Modelling the procurement process and production disruption of a multilayer cruise supply chain," Maritime Policy & Management, Taylor & Francis Journals, vol. 47(4), pages 435-455, June.
    • Handle: RePEc:taf:marpmg:v:47:y:2020:i:4:p:435-455
    DOI: 10.1080/03088839.2019.1691277
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