STRATEGIC INVENTORIES IN SUPPLY CHAIN CONTRACTS UNDER VARIOUS CONFIGURATIONS OF COMPETITION AND COOPERATION

Abstract

In this thesis we first investigate the existence and the effect of strategic inventories for a single supply chain where the supplier and the retailer bargain for the trading terms. For a two-period problem, we consider both the case of bargaining taking place in both periods and the scenario where the two parties bargain only in one period. We compare our results with those for the scenario where the supplier and the retailer trade under a Stackelberg game framework. We then introduce horizontal competition between supply chains into the system and study how the impact of strategic inventories changes compared to other settings. We have shown that strategic inventories do exist in optimal contracts under most scenarios, and could project different impacts on supply chain performances and profits.