Analysis of Asymmetric Quantity Commitment in Decentralized Supply Chains

Zhaoqiong Qin, Wen-Chyuan Chiang, Robert Russell

OAI: oai:igi-global.com:275791 • DOI: 10.4018/IJORIS.20210401.oa5

Quantity commitment chosen by firms in competition has been demonstrated by previous studies to mitigate price competition. This study demonstrates that asymmetric quantity commitment can always arise when one firm (e-tailer) shortens lead times or adopts just-in-time systems to circumvent quantity commitment while another firm (retailer) does not. To study the asymmetric quantity commitment in decentralization, a multi-stage game is analyzed, and backward induction is adopted. The authors find that the retailer always adopts the quantity commitment in the decentralization to achieve a higher profit.

Business Process Management Business and Management Business Information Systems