Abstract
The focus of this paper is placed on evaluating the benefit of cooperation for two retailers with the same product who face suppliers with yield uncertainties. Two cooperation strategies are analyzed: one is inventory pooling and the other is centralized purchasing. The retailers’ expected profit functions under the two cooperation strategies with stochastic deliveries are first obtained, and then the optimal order quantities are identified and compared. Finally, the sensitivity of the benefits of cooperation to various input factors is examined through numerical examples. The study contributes to the literature by providing a better understanding of risk sharing and by shedding insights on the value of cooperation under supply risks.
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© 2012 Springer-Verlag Berlin Heidelberg
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Hou, J., Sun, Y. (2012). The Benefit of Cooperation between Retailers under Supply Uncertainties. In: Watada, J., Watanabe, T., Phillips-Wren, G., Howlett, R., Jain, L. (eds) Intelligent Decision Technologies. Smart Innovation, Systems and Technologies, vol 16. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-29920-9_51
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DOI: https://doi.org/10.1007/978-3-642-29920-9_51
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-29919-3
Online ISBN: 978-3-642-29920-9
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