Procurement Strategies and Auction Mechanism for Heterogeneous Service Providers in a Service Supply Chain
Round 1
Reviewer 1 Report
(1) In the introduction, authors should clearly state the differences between previous studies and this study. In addition, a more specific explanation of the market conditions underlying the study is required. Also, please provide a more specific explanation of the new knowledge that this study presents in the literature. In addition, please provide more justification for the excellence of this paper.
(2) In the previous research review part, please summarize and organize previous studies more systematically by related research topic, and clarify the differences between them. In particular, please include the following prior studies on the risk-averse model in addition to your references.
- Choi, Sungyong, and Andrzej Ruszczyński. "A risk-averse newsvendor with law invariant coherent measures of risk." Operations Research Letters 36.1 (2008): 77-82.
- Choi, Sungyong, Andrzej Ruszczyński, and Yao Zhao. "A multiproduct risk-averse newsvendor with law-invariant coherent measures of risk." Operations Research 59.2 (2011): 346-364.
- Choi, Sungyong, and Andrzej Ruszczyński. "A multi-product risk-averse newsvendor with exponential utility function." European Journal of Operational Research 214.1 (2011): 78-84.
(3) Overall, the explanation of the research model is very little, and the explanation of the research results is also very little. Which sub-models are risk-averse models and which sub-models are risk-neutral models? In the risk-averse sub-models, which players are risk-averse and which players are risk-neutral? A specific and detailed description of the study model settings is required.
(4) In conclusion, please re-summarize the practical and theoretical contribution of this study. Also, please describe the limitations of this study and future research directions. Please describe the implications and insights of this study and the scalability of the research results.
(5) Discussion and interpretation of analysis results is very insufficient. Also, explanations of the formula development process and mathematical symbols are very poor.
(6) What is the classification criteria for proposition and theorem? It seems unclear what criteria were set as proposition and theorem, respectively.
(7) It is recommended that the proof in the main manuscript be moved to the appendix.
(8) Authors are requested to edit the manuscript according to the journal editorial guidelines. There are some typos. Please proofread the manuscript very carefully. Meanwhile, for English abbreviations, be sure to include the full name when using it for the first time.
Author Response
Response to Referee 1
We would first like to thank you for all the constructive and critical comments on our paper. When revising this paper, we would like to assure you that we have seriously considered all comments and diligently addressed all concerns as much as possible. Regarding your comments (in italics), we have addressed them in our revision as follows:
- In the introduction, authors should clearly state the differences between previous studies and this study. In addition, a more specific explanation of the market conditions underlying the study is required. Also, please provide a more specific explanation of the new knowledge that this study presents in the literature. In addition, please provide more justification for the excellence of this paper.
Our response: Thanks for your critical and constructive comments. In the existing literature, some papers employ the contract to select supplier and coordinate the supply chain, but few papers consider using auction contract to select the supplier with preservation profit , which is a significant difference from the setting in our paper.
- In the previous research review part, please summarize and organize previous studies more systematically by related research topic, and clarify the differences between them. In particular, please include the following prior studies on the risk-averse model in addition to your references.
- Choi, Sungyong, and Andrzej Ruszczyński. "A risk-averse newsvendor with law invariant coherent measures of risk." Operations Research Letters 36.1 (2008): 77-82.
- Choi, Sungyong, Andrzej Ruszczyński, and Yao Zhao. "A multiproduct risk-averse newsvendor with law-invariant coherent measures of risk." Operations Research 59.2 (2011): 346-364.
- Choi, Sungyong, and Andrzej Ruszczyński. "A multi-product risk-averse newsvendor with exponential utility function." European Journal of Operational Research 214.1 (2011): 78-84.
Our response: Thanks for your valuable and constructive comments. We have organized previous studies and included the above references into corresponding positions.
3.Overall, the explanation of the research model is very little, and the explanation of the research results is also very little. Which sub-models are risk-averse models and which sub-models are risk-neutral models? In the risk-averse sub-models, which players are risk-averse and which players are risk-neutral? A specific and detailed description of the study model settings is required.
Our response: Thanks for your constructive suggestion. We have revised and strengthened the explanation of the research results and the managerial insights in our revision.
4.In conclusion, please re-summarize the practical and theoretical contribution of this study. Also, please describe the limitations of this study and future research directions. Please describe the implications and insights of this study and the scalability of the research results.
Our response: Thank you for your kind comments. We have expanded the conclusion part to conclusion, limitations and future researches in this revision.
- Discussion and interpretation of analysis results is very insufficient. Also, explanations of the formula development process and mathematical symbols are very poor.
Our response: Thanks for your valuable and constructive comments. In the revision, we have strengthened the interpretation of analysis and improved the presentation of mathematical symbols.
- What is the classification criteria for proposition and theorem? It seems unclear what criteria were set as proposition and theorem, respectively.
Our response: Thank you for your kind comments. We have employed Lemmas and Propositions to replace proposition and theorem in order to explicitly distinguish corresponding conclusion.
- It is recommended that the proof in the main manuscript be moved to the appendix.
Our response: Thanks for your valuable and constructive comments. We have moved the proof to the appendix.
- Authors are requested to edit the manuscript according to the journal editorial guidelines. There are some typos. Please proofread the manuscript very carefully. Meanwhile, for English abbreviations, be sure to include the full name when using it for the first time.
Our response: Thank you for your kind comments. According to your comments, we have carefully examined throughout this version and double checked English abbreviations.
Reviewer 2 Report
Abstract: The problem should be defined and the findings should be summarized here.
The two competitive SPs' backgrounds should be presented before the methodology so that we understood their capabilities and how they get into contact with SI.
Research Methodology: A process flow diagram should be introduced to help readers understand the process of answering the research objectives using several situations where mathematical formulas are presented.
What was the reference or reason for fixing the parameters to: fix the parameters b = 2, g = 10000, c = 5, s¯ = 15, kl = 300, kh = 200
The structure of the paper is challenging to read since you have many mathematical formulas. It is advisable that the authors improved on the introduction of sections and sub-sections. Additionally, perhaps authors can provide a summary of what the section will discuss so that readers know the section is heavy in mathematical formulas and by reading the introduction of the section or the ending of the section, readers can get an abstract understanding of what the authors wanted to measure.
Another issue authors need to solve is the parameters introduced in this paper. How did the authors identify the parameters and is it based on a real case or company? If yes, then the background of the company should be introduced so other scholars can replicate or improve based on similar industries. As of now, the parameters are more of wishful thinking or expected numbers. The mathematical formula was not the originality of this paper, thus, the parameters source is important.
Conclusion: No discussion on the auction supply chain but the results stated the confirmed knowledge that cost information should be shared among supply chain partners to make the optimal solutions. The problem is that in the real scenario, it is not going to be that transparent. How can your findings help to solve the problem or bridge the gap?
Author Response
Response to Referee 2
We would first like to thank you for your recognition of our paper and then thank you for all the constructive and kind comments. When revising this paper, we would like to assure you that we have seriously considered all comments and diligently addressed all concerns as much as possible. Regarding your comments (in italics), we have addressed them in our revision as follows:
- Abstract: The problem should be defined and the findings should be summarized here.
Our response: Thank you for your kind comments. According to your comments, we have made corresponding revisions. The problem is clearly defined and stated corrsponding findings.
- The two competitive SPs' backgrounds should be presented before the methodology so that we understood their capabilities and how they get into contact with SI.Research Methodology: A process flow diagram should be introduced to help readers understand the process of answering the research objectives using several situations where mathematical formulas are presented.
Our response: Thank you for your kind comments. According to your comments, we have supplemented the process flow diagram for two-part auction contracting to help readers understand the auction process.
- What was the reference or reason for fixing the parameters to: fix the parameters b = 2, g = 10000, c = 5, s¯ = 15, kl = 300, kh = 200
Our response: Thank you for your kind comments. We employed simulation to prove the consistence between numerical examples and theoretical proof. The parameters setting comes from the parameters requirements in the main body of this paper.
- The structure of the paper is challenging to read since you have many mathematical formulas. It is advisable that the authors improved on the introduction of sections and sub-sections. Additionally, perhaps authors can provide a summary of what the section will discuss so that readers know the section is heavy in mathematical formulas and by reading the introduction of the section or the ending of the section, readers can get an abstract understanding of what the authors wanted to measure.
Our response: Thanks for your valuable and constructive comments. We have moved the proof to the appendix in order to facilitate readers and help readers better understand this paper.
- Another issue authors need to solve is the parameters introduced in this paper. How did the authors identify the parameters and is it based on a real case or company? If yes, then the background of the company should be introduced so other scholars can replicate or improve based on similar industries. As of now, the parameters are more of wishful thinking or expected numbers. The mathematical formula was not the originality of this paper, thus, the parameters source is important.
Our response: Thank you for your kind comments. We employed simulation to prove the consistence between numerical examples and theoretical proof. The parameters setting comes from the parameters requirements in the main body of this paper.
- Conclusion: No discussion on the auction supply chain but the results stated the confirmed knowledge that cost information should be shared among supply chain partners to make the optimal solutions. The problem is that in the real scenario, it is not going to be that transparent. How can your findings help to solve the problem or bridge the gap?
Our response: Thanks for your valuable comments. According to your suggestion, we have re-described this corresponding conclusion. We revise the statement into “Therefore, the high-cost SP is always motivated to truthfully proclaim rather than distort exact cost information”,which is much clearer.
Reviewer 3 Report
The presented material was supposed to be a plan supporting managers in the decision-making process regarding the optimization of supply chains using the auction mechanism. The manager makes decisions based on short information divided into possible variants, allowing him to choose among the available solutions. Meanwhile, the complexity of the presented solution disqualifies them completely from this type of application. The material may instead provide the theoretical basis for the preparation of the solution described above. The submitted form is not suitable for publication in the journal.
In addition, the authors did not avoid many substantive and editorial errors, which also disqualify:
1.page 8 - line 168 - "For the channel coordination problem, following the Gan et al. (2005) approach for the channel coordination condition based on the Pareto optimality concept (see Gan et al. 2004), we can obtain the following optimization problem "- The bibliography does not contain any of the articles referenced by the authors! So how do we come to the concept discussed by the authors in the article?
2. p. 28 - Table 1 - the information is completely incomprehensible to the reader! - analogous table 2 - page 34
3. Tables 3 and Table 4 - the format inconsistent with the requirements of the journal
Author Response
Response to Referee 3
We would first like to thank you for your recognition of our paper and then thank you for all the constructive and kind comments. When revising this paper, we would like to assure you that we have seriously considered all comments and diligently addressed all concerns as much as possible Regarding your comments (in italics), we have addressed them in our revision as follows:
In addition, the authors did not avoid many substantive and editorial errors, which also disqualify:
1.page 8 - line 168 - "For the channel coordination problem, following the Gan et al. (2005) approach for the channel coordination condition based on the Pareto optimality concept (see Gan et al. 2004), we can obtain the following optimization problem "- The bibliography does not contain any of the articles referenced by the authors! So how do we come to the concept discussed by the authors in the article?
2. p. 28 - Table 1 - the information is completely incomprehensible to the reader! - analogous table 2 - page 34
3. Tables 3 and Table 4 - the format inconsistent with the requirements of the journal
Our response: Thanks for your kind and valuable comments. We have supplemented corresponding explanation, for example,”↑” increasing; ”↓” decreasing.We have rearranged the Tables 3 and 4 so as to consist with the requirements of the journal.
Before closing, we wish to thank you again in helping us to improve the quality of this paper. Thank you!
Round 2
Reviewer 1 Report
(1) Authors should highlight the differences between previous studies and this study more clearly.
(2) The authors used VaR as a risk measure in this study. Accordingly, please review previous SCM studies using VaR in more detail in the literature and justify why VaR was used.
(3) In the conclusion, the authors additionally describe the practical implications, insights and contribution of this study.
(4) Authors should edit according to the journal editorial guideline. Also, when using an English abbreviation for the first time, be sure to include the full name. Lastly, I recommend that you receive English proofreading by Native English Proofreader.
Author Response
We would first like to thank you for all the constructive and critical comments on our paper. When revising this paper, we would like to assure you that we have seriously considered all comments and diligently addressed all concerns as much as possible. Regarding your comments (in italics), we have addressed them in our revision as follows:
- Authors should highlight the differences between previous studies and this study more clearly.
Our response: Thanks for your critical and constructive comments. In the literature review section, we have supplemented and highlighted the differences between the existing studies and this study in this revision:
“In this study, we consider the channel participants' risk preferences and reservation profits, and the main differences between our paper and the literature mentioned above can be summarized as follows. Firstly, in consideration of individual reservation profit, we employ auction and contracting mechanism for channel coordination for a service supply chain in which traditional contracts are generally used such as two-part contract, cost sharing contract and risk sharing contract etc.. Our findings also provide a useful tool for firms to deal with supliers selection and channel coordination. Secondly, we investigate the impacts of production cost variation and the value of information on the participants' profits and preferences in contrast to associated optimal policies in symmetric and asymmetric situations, which rarely appeared in the existing literature”.
- The authors used VaR as a risk measure in this study. Accordingly, please review previous SCM studies using VaR in more detail in the literature and justify why VaR was used.
Our response: Thanks for your valuable comments. In this revision, we have supplemented the definition of VaR and its application in the previous SCM studies.
“ At present, based on probability and statistics, value at risk (VaR) is one of the most widely and frequently employed models for risk measure in risk management (Olson and Wu [30], Paul et al. [32]). VaR can be characterized as a maximum expected loss, given some time horizon and within a given confidence interval, which is suitable for our model setting. ”
- In the conclusion, the authors additionally describe the practical implications, insights and contribution of this study.
Our response: Thanks for your valuable and constructive comments. We have additionally described the conclusion section, especially for practical implications and insights for industry managers.
- Authors should edit according to the journal editorial guideline. Also, when using an English abbreviation for the first time, be sure to include the full name. Lastly, I recommend that you receive English proofreading by Native English Proofreader.
Our response: Thanks for your valuable and constructive comments. We have repolished this manuscript and double checked English language.
Before closing, we wish to thank you again in helping us to improve the quality of this paper. Thank you!
Reviewer 2 Report
This paper is publishable as the authors have addressed the suggestions and improved the paper.
Author Response
Many thanks for your review.
Reviewer 3 Report
I propose to accept the article in the form submitted for review.
Author Response
Thank you very much!
This manuscript is a resubmission of an earlier submission. The following is a list of the peer review reports and author responses from that submission.
