Abstract
Access to new technologies is a key factor of competitive advantage for many supply chains. In this paper, we explore the impact of technology investment on supply chain coordination. To be specific, we analytically investigate the optimal pricing and technology investment decisions in a system consisting of two complementary suppliers and one manufacturer. On one hand, the suppliers are required to invest in new technologies in order to participate in the supply chain negotiations. On the other hand, the manufacturer acts as the Stackelberg leader, who offers a wholesale price (WS) contract to the suppliers. We compare both the decentralized and centralized settings, and show that if the supply chain members decide to cooperate and coordinate the system, they could increase the overall expected profit by at least 1/3 compared to the non-cooperative scenario. We then find that the cost-revenue sharing (CR) contract is capable of coordinating the two-supplier one-manufacturer supply chain. Interestingly, the CR contract also offers a win-win profit scenario to all parties of the negotiation.
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Acknowledgements
The authors are grateful for the partial financial support from the Natural Sciences and Engineering Research Council of Canada (NSERC); the National Natural Science Foundation of China under grant 71771138, the Special Foundation for Taishan Scholars of Shandong Province, China under grant tsqn201812061, the Science and Technology Research Program for Higher Education of Shandong Province, China under grant 2019KJI006; and the Secretary of Higher Education, Science, Technology and Innovation of Ecuador (Senescyt).
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Gallegos, C.A.R., Bai, Q., Chen, M. (2020). Coordination via Revenue and Technology-Cost Sharing in a Two-Supplier and One-Manufacturer Supply Chain System. In: Li, X., Xu, X. (eds) Proceedings of the Seventh International Forum on Decision Sciences. Uncertainty and Operations Research. Springer, Singapore. https://doi.org/10.1007/978-981-15-5720-0_5
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DOI: https://doi.org/10.1007/978-981-15-5720-0_5
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