Article ID Journal Published Year Pages File Type
1142399 Operations Research Letters 2012 6 Pages PDF
Abstract

We consider a decentralized setting where the suppliers choose their production capacity levels, and the retailer makes ordering decisions based on the suppliers’ capacities, where all firms are risk-neutral and any given supplier, who leads to random yield in production, is defined to be unreliable. We show that the suppliers install capacity levels such that the expected shortage for each supplier is the same and the retailer orders along each supplier’s capacity level.

Related Topics
Physical Sciences and Engineering Mathematics Discrete Mathematics and Combinatorics
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