TY - GEN
T1 - The choice of vertical control structure under chain-to-chain quantity competition and diseconomies of scale
AU - Zhao, Hai Xia
AU - Ai, Xing Zheng
PY - 2011
Y1 - 2011
N2 - We develop a chain-to-chain model which is defined by two manufacturers and two exclusive retailers under quantity competition and diseconomies of scale. We investigate the impact of quantity competition and scale diseconomies on the choice of vertical control structure from the aspects of manufacturer's performance and the supply chain's performance. The results show that: from the standpoint of manufacturer's performance, centralized structure is a dominant equilibrium that is not affected by the quantity competition and diseconomies of scale. From the attitude of the supply chain's performance, centralized structure is a dominant strategy when quantity competition between the two competitive supply chains is weak, or moderate, or relatively fierce and manufacturer's scale diseconomies is relatively strong; but centralized structure will be a prisoner dilemma when the quantity competition is relatively fierce and diseconomies of scale is relatively weak, or quantity competition is heavily fierce. What we examine expands the results of McGuire(1983) and will contribute to the academic support on the choice of vertical control structure under chain-to-chain competition.
AB - We develop a chain-to-chain model which is defined by two manufacturers and two exclusive retailers under quantity competition and diseconomies of scale. We investigate the impact of quantity competition and scale diseconomies on the choice of vertical control structure from the aspects of manufacturer's performance and the supply chain's performance. The results show that: from the standpoint of manufacturer's performance, centralized structure is a dominant equilibrium that is not affected by the quantity competition and diseconomies of scale. From the attitude of the supply chain's performance, centralized structure is a dominant strategy when quantity competition between the two competitive supply chains is weak, or moderate, or relatively fierce and manufacturer's scale diseconomies is relatively strong; but centralized structure will be a prisoner dilemma when the quantity competition is relatively fierce and diseconomies of scale is relatively weak, or quantity competition is heavily fierce. What we examine expands the results of McGuire(1983) and will contribute to the academic support on the choice of vertical control structure under chain-to-chain competition.
UR - http://www.scopus.com/inward/record.url?scp=84863165544&partnerID=8YFLogxK
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U2 - 10.1109/ICSSSM.2011.5959479
DO - 10.1109/ICSSSM.2011.5959479
M3 - Conference contribution
AN - SCOPUS:84863165544
SN - 9781612843094
T3 - 8th International Conference on Service Systems and Service Management - Proceedings of ICSSSM'11
BT - 8th International Conference on Service Systems and Service Management - Proceedings of ICSSSM'11
T2 - 8th International Conference on Service Systems and Service Management, ICSSSM'11
Y2 - 25 June 2011 through 27 June 2011
ER -