×

zbMATH — the first resource for mathematics

Analysis of a two-stage telecommunication supply chain with technology dependent demand. (English) Zbl 1114.90043
Summary: We analyze a two-stage telecommunication supply chain consisting of one operator and one vendor under a multiple period setting. The operator faces a stochastic market demand which depends on technology investment level. The decision variables for the operator are the initial technology investment level and the capacity of the network for each period. The capacity that the operator installs in one period also remains available in subsequent periods. The operator can increase or decrease the available capacity at each period. For this model, an algorithm to find the centralized optimal solution is proposed. A profit sharing contract where firms share both the revenue and operating costs generated throughout the periods along with initial technology investment is suggested. Also a coordinating quantity discount contract where the discount on the price depends on the total installed capacity is designed. The case where the vendor decides on the technology investment level and the operator decides on the capacity of the network is also analyzed and it is shown that this game has a unique Nash equilibrium.

MSC:
90B50 Management decision making, including multiple objectives
90B18 Communication networks in operations research
91A40 Other game-theoretic models
PDF BibTeX XML Cite
Full Text: DOI
References:
[1] Aaker, S.A.; Carman, J.M., Are you overadvertising?, Journal of advertising research, 22, 4, 57-70, (1982)
[2] Agrell, P.J.; Lindroth, R.; Norrman, A., Risk, information and incentives in telecom supply chains, International journal of production economics, 90, 1, 1-16, (2004)
[3] Cachon, G.P., Supply chain coordination with contracts, () · Zbl 1232.90173
[4] Cachon, G.P.; Lariviere, M., Supply chain coordination with revenue-sharing contracts: strengths and limitations, Management science, 51, 1, 1-30, (2005) · Zbl 1232.90173
[5] Chu, W.; Desai, P.S., Channel coordination mechanisms for customer satisfaction, Marketing science, 14, 4, 239-272, (1995)
[6] Dana, J.D.; Petruzzi, N.C., The newsvendor model with endogenous demand, Management science, 47, 11, 1488-1497, (2001) · Zbl 1232.90038
[7] Fudenberg, D.; Tirole, J., Game theory, (1991), MIT Press · Zbl 1339.91001
[8] Jeuland, A.P.; Shugan, S.M., Managing channel profits, Marketing science, 2, 3, 239-272, (1983)
[9] Laffont, J.-J.; Tirole, J., Competition in telecommunications, Munich lectures in economics, (2000), MIT Press
[10] Netessine, S.; Rudi, N., Supply chain structures on the Internet and the role of marketing – operations interaction, (), 783-803, Chapter 19
[11] Petruzzi, N.C.; Dada, M., Pricing and the newsvendor problem: A review with extensions, Operations research, 47, 2, 183-194, (1999) · Zbl 1005.90546
[12] Porteus, E.L., Foundations of stochastic inventory theory, (2002), Stanford Business Books
[13] Taylor, T.A., Supply chain coordination under channel rebates with sales effort effects, Management science, 48, 8, 992-1007, (2002) · Zbl 1232.90198
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. It attempts to reflect the references listed in the original paper as accurately as possible without claiming the completeness or perfect precision of the matching.