Managing Supply Uncertainty with an Information Market

We propose a market-based information aggregation mechanism to manage the supply side uncertainty in the supply chain. In our analytical model, a simple supply chain consists of a group of retailers who order a homogeneous product from two suppliers. The two suppliers differ in their ability to fulf...

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Main Authors: GUO, Zhiling, FANG, Fang, WHINSTON, Andrew B.
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2009
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Online Access:https://ink.library.smu.edu.sg/sis_research/1867
https://ink.library.smu.edu.sg/context/sis_research/article/2866/viewcontent/Managing_Supply_Uncertainty_with_an_Information_Market_afv.pdf
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Institution: Singapore Management University
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spelling sg-smu-ink.sis_research-28662018-09-03T03:42:30Z Managing Supply Uncertainty with an Information Market GUO, Zhiling FANG, Fang WHINSTON, Andrew B. We propose a market-based information aggregation mechanism to manage the supply side uncertainty in the supply chain. In our analytical model, a simple supply chain consists of a group of retailers who order a homogeneous product from two suppliers. The two suppliers differ in their ability to fulfill orders – one always delivers orders and the other fulfills orders probabilistically. We model the supply chain decisions as a Stackelberg game where the supplier who has uncertain reliability decides a wholesale price before the retailers who independently receive signals about the supplier’s reliability determine their sourcing strategies. We then propose an information market to trade binary contracts with payoffs contingent on the supplier’s true reliability. Using a simple uniform demand distribution, we demonstrate that the market-based information aggregation mechanism improves the overall supply chain efficiency. 2009-12-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/sis_research/1867 info:doi/10.1007/978-3-642-17449-0_8 https://ink.library.smu.edu.sg/context/sis_research/article/2866/viewcontent/Managing_Supply_Uncertainty_with_an_Information_Market_afv.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Computing and Information Systems eng Institutional Knowledge at Singapore Management University Information market Supply chain Uncertainty Game theory Computer Sciences Operations and Supply Chain Management
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Information market
Supply chain
Uncertainty
Game theory
Computer Sciences
Operations and Supply Chain Management
spellingShingle Information market
Supply chain
Uncertainty
Game theory
Computer Sciences
Operations and Supply Chain Management
GUO, Zhiling
FANG, Fang
WHINSTON, Andrew B.
Managing Supply Uncertainty with an Information Market
description We propose a market-based information aggregation mechanism to manage the supply side uncertainty in the supply chain. In our analytical model, a simple supply chain consists of a group of retailers who order a homogeneous product from two suppliers. The two suppliers differ in their ability to fulfill orders – one always delivers orders and the other fulfills orders probabilistically. We model the supply chain decisions as a Stackelberg game where the supplier who has uncertain reliability decides a wholesale price before the retailers who independently receive signals about the supplier’s reliability determine their sourcing strategies. We then propose an information market to trade binary contracts with payoffs contingent on the supplier’s true reliability. Using a simple uniform demand distribution, we demonstrate that the market-based information aggregation mechanism improves the overall supply chain efficiency.
format text
author GUO, Zhiling
FANG, Fang
WHINSTON, Andrew B.
author_facet GUO, Zhiling
FANG, Fang
WHINSTON, Andrew B.
author_sort GUO, Zhiling
title Managing Supply Uncertainty with an Information Market
title_short Managing Supply Uncertainty with an Information Market
title_full Managing Supply Uncertainty with an Information Market
title_fullStr Managing Supply Uncertainty with an Information Market
title_full_unstemmed Managing Supply Uncertainty with an Information Market
title_sort managing supply uncertainty with an information market
publisher Institutional Knowledge at Singapore Management University
publishDate 2009
url https://ink.library.smu.edu.sg/sis_research/1867
https://ink.library.smu.edu.sg/context/sis_research/article/2866/viewcontent/Managing_Supply_Uncertainty_with_an_Information_Market_afv.pdf
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