Optimal decisions for a dual-channel supply chain under information asymmetry

Mingyong Lai; Hongzhao Yang; Erbao Cao; Duo Qiu; Jing Qiu

doi:10.3934/jimo.2017088

Article Contents

2018, Volume 14, Issue 3: 1023-1040. Doi: 10.3934/jimo.2017088

This issue Previous Article Uniqueness of solutions to fuzzy relational equations regarding Max-av composition and strong regularity of the matrices in Max-av algebra Next Article Second-order optimality conditions for cone constrained multi-objective optimization

Optimal decisions for a dual-channel supply chain under information asymmetry

1.
Hunan provincial Engineering Research Center of Electric Transportation, and Smart Distributed Network, College of Economics and Management, Changsha University of Science and Technology, Changsha 410114, China
2.
Hunan Province Key Laboratory of Logistics Information and Simulation Technology, College of Economics and Trade, Hunan University, Changsha 410079, China
3.
Commonwealth Scientific and Industrial Research Organization, Energy Center, Mayfield West, NSW2304, Australia

* Corresponding author: Erbao Cao
* Corresponding author: Erbao Cao

Received: February 2016

Revised: May 2017

Early access: September 2017

Published: June 2018

The authors are supported by the National Natural Science Foundation of China under Grants 71420107027,71671061,71331001 and 91547113, the Program for New Century Excellent Talents in University under Grants NCET-13-0181, the Science and Technology Projects of Hunan Province under Grants 2016WK2015 and 2017CT5015.

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Abstract

We discuss the optimal pricing and production decisions in a channel supply chain under symmetric and asymmetric information cases. We compare the optimum policies between the asymmetric information and the full information cases. We analyze the effect of the reseller's cost information on the profits of the partners. We find that information asymmetry is beneficial to the reseller, but is inefficient to the manufacturer and the whole supply chain. The information value increases with uncertainties arising from the reseller's cost structure. The dual-channel supply chain can share information and achieve coordination, if the lump-sum side payment from the manufacturer can make up the loss of the reseller due to sharing information. Finally, the effectiveness of the proposed models is verified by numerical examples.

Keywords:

Mathematics Subject Classification: Primary: 58F15, 58F17; Secondary: 53C35.

Citation:

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Figure 1. Variation of prices with $\theta$ under asymmetric information case

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Figure 2. Variation of demands with $\theta$ under asymmetric information case

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Figure 3. Variation of the manufacturer's profit for various $B$ under asymmetric information case

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Table 1. The optimum policies under full and asymmetric information cases

	$p_1$	$p_2$	$w$	$L_1$	$D_2$	D	$\pi_m$	$\pi_r$	$\pi$
Full Information	630	510	185.9	192.793	326.126	518.919	244226	6188	250414
Asymmetric Information	592.771	510	141.225	326.952	212.091	539.043	230462	17799	248261

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