Competitive Supply Research Articles

“Now or Later?” When to Deploy Qualification Screening in Open-Bid Auction for Re-Sourcing

Designing Open-bid Procurement Auction with Supplier Qualification Screenings Manufacturers often use re-sourcing initiatives to keep their suppliers’ pricing competitive; e.g., new entrant suppliers are identified and invited to compete with the incumbent supplier for supply contracts in an open-bid auction. To ensure that entrant suppliers have the capability of executing the contract, the conventional approach for many manufacturers is to conduct qualification screenings on all the entrants prior to auction bidding and only allow qualified entrant suppliers to compete in the auction. In “‘Now or Later?’ When to Deploy Qualification Screening in Open-Bid Auction for Re-Sourcing”, Zhang, Chen, and Katok explore an alternative arrangement of this process where all entrant suppliers are invited for bidding first before qualification screenings are selectively conducted afterward to determine the contract winner. This new approach helps reduce the waste of manufacturers’ screening efforts on suppliers with uncompetitive bids but in the meantime introduces incentives for less competitive supplier bidding behavior. They provide analytical and numerical evidence that this new approach could be very effective in managing manufacturers’ procurement costs.

Effects of green innovation and advertisement in an imperfect production‐based competitive supply chain under two‐tier credit facility

This article investigates game‐theoretic approaches in a competitive supply chain model with imperfect production and a two‐tier credit facility under the environment of carbon emissions. In this environment, we incorporate a manufacturer and two rival retailers who compete against one another for selling price and advertisement of a product, where the members offer trade credit facilities to the downstream players. We consider that the manufacturer invests in green technology to curtail the emission during the production and rework process. The retailers provide advertisements to expand their businesses, where market demands are dependent on their selling prices, advertisement frequencies, and the green innovation level. Here, we analyze the model under the cap‐and‐trade policy for various subcases of the centralized and decentralized systems and discuss a solution algorithm for the optimal results. For the practical feasibility test of the model, numerical analysis is examined, and the impact of variations of the critical parameters is studied. The study's primary motive is to figure out the optimal operative strategies and collaborative actions on the decision variables, which leads to the profits of the supply chain to a lofty extent. We observe that the offered credit periods are highly responsive to the profit functions so that the chain members have to be more careful and draw a compact plan for credit policy. Moreover, the manufacturer has to invest in green technology up to a certain level, as, after that level, high investment costs will hamper the optimal profit. Besides, the retailers must have adequate policies for selling prices and advertisement frequencies to acquire a higher yield.

Economic comparison of 4GDH and 5GDH systems – Using a case study

For decades the focus of district heating (DH) has been on energy efficiency and minimum operating temperatures. This quest for continuous efficiency improvements led to the modern 4th generation of DH (4GDH), operating at lowest possible temperature for direct utilization by end-user. In recent years the term 5th generation DH (5GDH) has become popular for individual heat pump systems sharing thermal sources via uninsulated pipe network. While 5GDH has similarity with 4GDH it is a technically different solution, as the heat generation is moved to the end-users. When discussing 4GDH and 5GDH the focus quickly revolves about the efficiency of the distribution grid, however the discussion should be on the overall system efficiency and the levelized cost of the heat (LCOH). This paper analyzes LCOH for a mixed building area consisting of a central heat source, high or low energy buildings connected to 4GDH, 5GDH or a 4GDH variant with end-user temperature boosting for domestic hot water purposes. The analysis considers two countries: DK and UK. The analysis further explores the impact of the heat source temperature, from 10 °C to 60 °C, on the LCOH. The results indicate that 4GDH is the more competitive heat supply solution for the considered case.

ДЕРЖАВА І РИНОК В УМОВАХ СУЧАСНОЇ ГЛОБАЛІЗАЦІЇ: БОРОТЬБА ПРОТИЛЕЖНОСТЕЙ ЧИ СИНЕРГІЯ ВЗАЄМОДІЇ?

Держава, ринок і глобалізація – це три поняття, взаємний зв'язок і вплив яких можна відстежити протягом практично всього часу їх існування. Можливо, що, як стверджують деякі дослідники-антропологи, у первісних суспільствах економіка не базувалася на ринкових відносинах, але становлення інститутів ринку неможливе без захисту з боку влади (державної або, принаймні, квазідержавної) і навіть більше того – без прямого креативного втручання державної влади. При цьому, однак, слід ураховувати, що в умовах глобалізації відбуваються зміни як у суті держави, так і в тих завданнях, які вона повинна вирішувати. Інколи лунають твердження про ерозію або відмирання національної держави, які поки що не відповідають дійсності. Звісно, політичний та економічний розвиток суспільства вносить свої корективи, однак такі функції, як захист від економічної агресії, законодавче забезпечення добросовісної конкуренції, участь у великих проектах, що не можуть бути здійснені приватним бізнесом, залишаються незмінними по суті, хоча і змінюються за формою – в першу чергу під впливом процесів інтернаціоналізації.Таким чином, можна констатувати, що роль держави в економіці не зменшується, а, радше, збільшується за рахунок модернізації та інтернаціоналізації її функцій. Значення має не кількість, а якість. Але й переоцінювати роль держави, в усьому покладатися на уряд і державних менеджерів теж не варто. Необхідно чітко визначитися з тим, яку саме державу будує країна, і з огляду на це впроваджувати відповідну економічну політику належними методами та інструментами.

The impact of government intervention in competitive electronic closed-loop supply chain to support internal industry

Due to the development of various industries, including electronic products industries, waste management of these products in order to reduce serious damages into the environment has been considered by human societies. On the other hand, due to the fact that a high percentage of the waste of these products have capability to use for production of new products, the management of these chains is more important to reduce production costs and consequently reduction the damage on the environment. There are competitive chains in which a variety of internal products are produced by a chain that competes with products produced by another chain abroad. In the proposed mathematical model, in addition to considering the waste management of these types of products, the government tries to intervene in a way that supports internal chain. Therefore, the first purpose of this study is to answer how waste management in the competitive chain (especially electronic products) and the second purpose is to answer how the government intervenes in this type of competitive chain to support domestic industry. These two cases will be examined by presenting a mathematical model. Due to the competitive demand function for both supply chains, the importance of pricing and quality determination is particularly evident. Optimal decision variables that impact on the demand functions are concluded by Stackelberg game using manufacturers leadership without and under government intervention. Numerical examples indicate reduction on using fresh raw materials for internal manufacturer and subsequently, reduction purchasing cost of fresh raw materials by government intervention. This leads to a reduction in production costs for the internal manufacturer, which in a way has led to a boom in the internal industry. Furthermore, government intervention leads to reduce in price of products for customers. Finally, in order to extract some management concepts, several sensitivity analyzes are performed on the main parameters.

Dynamic game of corporate social responsibility in a supply chain with competition

In the background of economic globalization, the rapid development of information technology and the individualization of customer demand make it difficult for a single enterprise to cope with the increasingly complex market competition. The traditional competition mode between enterprises is difficult to continue. Instead, it is the competition between one supply chain and another supply chain that becomes important. To obtain a sustainable competitive advantage, corporate social responsibility has gradually become the focus of supply chain management. In reality, enterprises in supply chains generally have a long-term, dynamic and stable cooperative relationship, and their corporate social responsibilities have complexity characteristics, which would change with time. Therefore, it is more practical to conduct a dynamic research on the social responsibility decision-making in competitive supply chains under the continuous time background. This study contributes a new approach to the literatures on competitive supply chains and corporate social responsibilities in supply chains by extending the static perspective to a dynamic one, so as to analyze the application of corporate social responsibilities in competitive supply chains. By constructing competition models with two two-echelon supply chains, this paper uses differential game theory to study the decision-making related to corporate social responsibility in supply chains in three situations: decentralized decision-making, centralized decision-making and combined decision-making. This paper determine and contrast the optimal price and corporate social responsibility decision-making in each situation, and analyze the impacts of corporate social responsibility, supply chain reputation and supply chain competition on supply chain revenues. Through simulation analysis, this paper find that corporate social responsibility is an effective tool to realize sustainable supply chain. The corporate social responsibility effect of the centralized supply chain is the greatest. Consumer social responsibility preference, corporate social responsibility efficiency and competition intensity are positively correlated with corporate social responsibility effort. Discount rate and CSR cost coefficient are negatively correlated with corporate social responsibility effort. Finally, some managerial implications are put forward based on the research results.

A multiperiod competitive supply chain framework with environmental policies and investments in sustainable operations

In this paper, we develop a supply chain network model in which firms compete noncooperatively in an oligopolistic manner in discrete time periods over a finite planning horizon. Each firm makes a strategic decision regarding its target sustainability rating and tactical decisions of product flows, in the presence of consumer preferences for sustainability and a variety of environmental policies. Such policies include ecological taxes for different types of pollution, subsidies for pollution control, command-and-control policies, as well as hybrid approaches with different possible combinations of policy instruments. Furthermore, our model captures dynamic changes in not only the consumer purchasing behavior, but also the operational costs and environmental pollution, as well as government environmental policies. A series of numerical examples evaluate the impacts of consumer preferences for sustainability and environmental policies on firms’ profitability and their environmental footprint. The results indicate that firms will improve sustainable operations as long as it is financially valuable for them to do so, which mandates governments and firms to educate consumers about sustainability. Numerical examples also reveal under which environmental policies sustainability can be profitable.

Optimization of competitive supply chains with retailers\u2019 horizontal cooperation and consumers\u2019 green preference

With the wider recognition of the concept of environmental protection and sustainable development, more and more manufacturers have begun to implement green manufacturing strategies. However, green development is a gradual process, and the coexistence of ordinary and green products is common. This paper examines the competition between ordinary products and green ones based on supply chains, and discusses the impact of retailers’ horizontal cooperation on pricing, greenness, market demand, profit, and other related decisions and results. Model solutions and numerical experiments have shown that consumers’ green preference (CGP) has a positive impact on the results of green products and negative effects on those of ordinary ones; however, the impact of competition intensity (CI) is more complex, and the trend tends to change if it exceeds a certain critical value. In general, cooperation encourages retailers to raise prices and make manufacturers lower wholesale prices, but the retail and wholesale prices of green products are always higher than the corresponding prices of ordinary ones. Market demand can be reduced due to cooperation, but it is conducive to strengthening green products’ greenness. However, if CI exceeds a certain threshold, the greenness will be weakened by cooperation. Both retailers can benefit from cooperation easily and they always reach a win-win situation, but manufacturers suffer badly as a result. Nevertheless, when CI is weak, cooperation will bring a greater profit improvement to the whole chain of ordinary products; in this case, if a retailer is willing to compensate for a manufacturer’s profit loss and help it benefit from cooperation, the manufacturer will encourage the retailer to cooperate horizontally with the green retailer, but the green chain will be seriously damaged. When CI is strong, the greenness of green products is not obvious enough, and cooperation can bring some chances to achieve a win-win situation for two chains; if the green retailer can obtain a larger share from cooperation under this scenario, it can also enable its manufacturer to obtain compensation and change the profit increment from negative to positive. From an overall perspective, when CI is very weak or very strong, horizontal cooperation is conducive to improving the profit of the entire supply chain competition system, but when CI is relatively flat, independent operation for each chain is more advantageous; if the competition status is stable and unchanged, independent competition will be superior to horizontal cooperation.

High nutrient supply and interspecific belowground competition enhance the relative performance of Picea mariana (Mill). B.S.P seedlings over Picea glauca [Moench] Voss. under elevated CO2

Key message We tested how nutrient supply and interspecific belowground competition affect ecophysiological and morphological responses to elevated CO 2 in black ( Picea mariana (Mill). B.S.P) and white spruce ( Picea glauca [Moench] Voss.). It is found that belowground competition and high nutrient greatly enhanced the relative performance of black spruce over white spruce at elevated CO 2 . ContextWe have previously found that interspecific belowground competition reduce growth, whole seedling photosynthesis, and biomass allocation to leaf and that belowground competition and nutrient supply affect responses to elevated CO2 in the above two species, but we did not examine the physiological and morphological mechanisms of the responses.AimsTo examine the interactive effects of belowground competition, nutrient supply and elevated CO2 on root morphology, photosynthetic rate, and biochemical and photochemical capacity of photosynthesis in black spruce (Sb, Picea mariana [Mill.] B.S.P.) and white spruce (Sw, Picea glauca [Moench] Voss.).MethodsSeedlings were grown in individual containers (no belowground competition) or in a common container (belowground competition) under 380 vs. 720 µmol mol−1 CO2 and high vs. low nutrient supply in the greenhouse for one growing season.ResultsElevated CO2 stimulated photosynthesis and nutrient use efficiency to a much greater degree in black than white spruce when they were grown in the same container, particularly under high nutrient supply. The ability to produce a greater length of roots per unit volume of soil was associated with the response of black spruce.ConclusionThe synergistic effects of elevated CO2 and belowground competition on the physiology and root morphology of black spruce suggest that elevated CO2 will likely increase the relative competitiveness of black spruce over white spruce.

Bi-level pricing and inventory strategies for perishable products in a competitive supply chain

This paper aims to develop a new bi-level game model for joint pricing and inventory decisions in a competitive supply chain consisting of a dominant manufacturer, who produces single perishable product from deteriorating raw materials, and two follower retailers who face nonlinear price-dependent demand and operate under Cournot assumptions. Three levels of warehousing including raw material warehouse, final product warehouse, and retail warehouses with exponential deterioration rates are considered to explore the joint impact of deterioration rate and price elasticity on the equilibrium inventory decisions. A Stackelberg–Nash–Cournot model is developed to seek the equilibrium prices, quantities, and replenishment cycles and is solved through an exact methodology. A numerical example is presented to validate the proposed model and comprehensive sensitivity analyses are carried out to measure the impact of the model’s key parameters including the deterioration rate in the producer’s and the retailers’ warehouses, the retail and competitor price elasticity, and the market scale on the equilibrium.

Multimarket Contact and Capacity: Evidence from the US Airline Industry

AbstractThis study examines the relationship between multimarket contact (MMC) and competitive supply decisions by firms. Using US air-carrier traffic data, we find that a carrier's MMC is negatively associated with the available seats in a market. This finding provides support for the “mutual forbearance hypothesis” and suggests that MMC facilitates tacit collusion in the supply of capacity. We also find that tacit collusion may be more difficult to achieve on longer-distance routes, where carriers face difficulties monitoring the capacities of rivals that compete through indirect routings. On the longer-distance routes, the negative relationship between MMC and capacity thus diminishes. Finally, we show that the negative impact of MMC on capacity has increased in strength over the past 10 years. Since the impact of MMC on reducing capacity may lead to higher airfares, our findings contribute to important antitrust considerations.

Strategic Pricing of Bee Products from the Ruse Region

The study reveals that in the context of global competition in supply, limited demand, and product parity in the B2B and B2C markets for bee products, there are significant limitations on the applicability of cost pricing methods (cost and desired profit) and partly of demand-based methods. In addition, the study shows that the most applicable pricing methods are the ones based on competition. Regional honey, the main product of beekeeping in the Ruse region, has a negligible differentiated value (monetary and psychological) in the B2B and B2C markets compared to its competing counterparts, due to which its price fluctuates around its market price. The lack of product differentiation, as well as established regional image and brand nowadays, do not allow producers to achieve prices higher than the market ones. Beekeeping farms in the Ruse region should build horizontal and vertical strategic relationships to gain price leadership through low costs and high quality. Value communication is necessary to protect the value and importance of regional bee products from competitors. This should be done by increasing the willingness of customers to pay a higher price for them. The pricing policy of beekeeping farms defines the general price behaviour based on the achieved differentiated value of the regional bee products and its continuous increase. The formation of regional bee products with high added value has a decisive role in the positive perception of the price by the different segments, due to which they reach higher price levels.

Competition issues including in the international agreements of the Eropean Union

The scientific thesis aims at theoretical definition and analysis of provisions on competition policy in selected international agreements, which affects the development of fair international business. Fair competition works effectively if entrepreneurs at the market can make their business decisions independently, while there has to be a legal framework applicable to protect the rights of competitors. At the international level there are several legal instruments applicable, which have a positive effect on fair competition among competitors in the market. International agreements concluded at the level of the EuropeanUnion with non-member countries contain provisions on healthy competition. Our intentionis to identify those international agreements containing competition provisions that affect thebehavior of entrepreneurs operating in international markets and obliged to respect competition rules, as they aim to achieve economic benefits. The European Union is undoubtedly involved in the process of global competition protection.

Can a combination of efficiency initiatives give us “good” rebound effects?

The increasing depletion of natural resources, combined with a wider set of pressures on the environment, has, in recent years, highlighted the need for a more efficient use of energy and a development process that involves alternative energy sources. Energy efficiency has received much attention as a solution, implying both monetary and emissions savings. However, the latter may be partially offset by the income and demand effects of the former, both in more efficient sectors and in spreading to the wider economy. This is the problem of rebound effects. Taking Spain as a case study, and introducing an energy-related CGE model that develops the inclusion of renewables, this paper evaluates a combination of efficiency initiatives to deliver both reduced energy use by households and a more sustainable supply of energy. Our findings suggest that a package aimed at improving efficiency in household electricity and petroleum use, combined with a more competitive supply of energy from renewable sources, may be the only way to get reductions in all energy use, and thus benefit the economy. Specifically, we consider how this package may lead to positive economic impacts and associated rebound effects, where the latter are focused on a greener energy supply.

The implications of contract timing on a supply chain with random yield

We investigate the impact of contract timing on a random yield supply chain consisting of a single buyer and multiple unreliable suppliers. In this supply chain, the buyer decides the order quantity and the suppliers decide the capacity levels which depend on the random yield rates. According to the sequence of these two decisions, we consider two contracts. If the buyer places the order prior to the supplier's capacity decision, we call it EA (ex-ante) contract. On the other hand, if the supplier's capacity decision comes first, we call it EP (ex-post) contract. Two different effects, the Ex-ante Ordering Effect and the Risk Pooling Effect are identified. The Ex-ante Ordering Effect represents that the buyer will increase the order quantity compared to the benchmark case with no random yield in both one-supplier and multiple-supplier settings under EA contract. The Risk Pooling Effect indicates that the buyer will increase the total order quantity as the number of unreliable suppliers increases in the multiple-supplier setting under both EA and EP contracts. As the number of unreliable suppliers increases, the reduction of supply uncertainty from suppliers will induce the buyer to increase the total order quantity. Furthermore, we show that the supplier prefers EA contract only if the number of suppliers is small, whereas the buyer unambiguously prefers EA contract because of the first-move advantage in the game. That is, both the buyer and supplier are better off from the buyer's ordering decision prior to the supplier's capacity decision in the one-supplier setting. However, in case of multiple suppliers, the buyer still prefers to order first, whereas the suppliers should decide the capacity investment first if the number of competitive suppliers is large.

PENGARUH STRATEGI BERSAING DAN MANAJEMEN RANTAI PASOKAN TERHADAP KINERJA PERUSAHAAN (STUDI PADA PT PACKET SYSTEMS INDONESIA)

This study aims to determine and analyze the effect of competitive strategy and supply chain management on company performance at PT Packet Systems Indonesia. The research method used is a quantitative method. Data collection techniques using questionnaires and literature study. The sampling technique uses the Slovin method with a sample of 77 respondents taken from all employees at PT Packet Systems Indonesia. Data analysis techniques using regression analysis and correlation using SPSS ver 25 as an analysis tool. Based on the results of the study showed that the competitive strategy has a positive influence and is at a fairly strong level on company performance that is equal to 34.3%. While supply chain management has a positive influence and is at a strong level on company performance that is equal to 62.1%.

Effect of free-riding behavior on vaccination coverage with customer regret

Prevention of influenza has been a social concern for a long time. But the coverage of vaccination, which is the most effective way to prevent people from infection, is usually undesirably low. It is envisaged that the free-riding behavior of people (customers) may be a main cause of the low vaccination coverage and affected by customer regret. To the best of our knowledge, no research has addressed this issue. In this paper, we formulate a vaccine demand model incorporating the free rider behavior and customer regret. Solving the model, we show that, as the coefficient of customer regret increases, more people would like to be free riders, which affects the vaccine market coordination. When the coefficient of customer regret is large enough, there will be no risk-taking customers under the socially optimal vaccination coverage. Extending the model to include incomplete demand information and oligopolistic supply, we find that both inaccurate estimation of customer regret and incomplete supply competition will lead to imbalance of supply and demand. Finally, considering government’s subsidy allocations on both supply and demand sides, we present a subsidy allocation mechanism to help the market achieve the largest equilibrium coverage.

Dual-sourcing and technology cooperation strategies for developing competitive supplier in complex product systems

This study aims to identify the strategies for developing competitive suppliers for a weak main manufacturer in a complex product systems (CoPS) supply chain. Several crucial characteristics in the competition of CoPS are considered when stakeholders exhibit differential ability. Dual-sourcing and a jointed strategy have been proposed to facilitate supplier development and technology cooperation. Multi-stage games are developed to explore the optimal strategies based on a benchmark model. The optimal decisions and a computational analysis are presented to examine the effect of supplier development. The results show that dual-sourcing and technology licensing contracts have a significant effect on improving indigenous technology capability in the short term. However, a dual-sourcing strategy with a jointed contract is the most efficient supplier development strategy and technology cooperation in the long term. The powerful or the collaborative supplier would be a first-tier supplier for the weak main manufacturer, depending on different parameters such as the technology transfer ability of the collaborative supplier and contract items. Overall, the impact of key parameters on the optimal strategies are considerably different.

The Downhill Trend in Commitment Mechanism of EU Competition Law: Empirical evidence

The European Commission has been given the authority to make commitments of undertakings in question binding with Article 9 of Regulation 1/2003. As a consequence of this reform, there has been a significant increase in commitment decisions compared to prohibition decisions over time, but prohibition decisions are currently predominant again. This study attempts to discuss this downward trend in commitment decisions taken in EU competition law between the years 2004 and 2020 through reviewing from a legal point of view and statistically examining the case law. Although the increase in commitment decisions is deemed beneficial in practical terms, it has increased legal uncertainties in the long run. This is because the provision of effective competition is left to negotiations to be reached between the undertakings and the Commission, instead of a thorough application of competition law rules in a uniform and consistent manner. In this context, discussions and recommendations are presented concerning under which circumstances commitment decisions are more appropriate to make.

Innovation information sharing between two competitive supply chains

AbstractWe study the innovation information sharing problem between two competing supply chains with one supplier and one manufacturer each. The manufacturer in each chain has private information about its product innovation degree and may choose to share such information with the competitor (horizontal information sharing), its supplier (vertical information sharing), or both (full transparency). We find that irrespective of the status of horizontal information sharing, vertical sharing always hurts the manufacturer, and sharing information horizontally is a dominating strategy for each manufacturer when the competition intensity is small. Furthermore, when competition intensity is not extremely large, full transparency can be realized through some transfer from the suppliers to the manufacturers, achieving a Pareto improvement for all parties, because the vertical and horizontal sharing are complementary to increase the supplier's benefit. Otherwise, neither horizontal nor vertical information sharing will occur.