Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1143037 | Operations Research Letters | 2012 | 6 Pages |
Abstract
We consider the impact of partial positive externalities (imperfect complementarity) among downstream retailers on supply chain performance. We show that double marginalization may fail to exist in a decentralized setting when some retailers carry multiple imperfect complements. By giving a precise characterization on the degree of complementarity, we prove that a decentralized supply chain loses at least 25% of the optimal profit and that its performance degrades rapidly with the complementarity effect.
Related Topics
Physical Sciences and Engineering
Mathematics
Discrete Mathematics and Combinatorics
Authors
Georgia Perakis, Wei Sun,