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Numeric Evaluation of Game-Theoretic Collaboration Modes in Supplier Development

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International Graduate School for, Dynamics in Logistics University of Bremen, 28335 Bremen, Germany
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Faculty of Production Engineering, University of Bremen, 28335 Bremen, Germany
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Author to whom correspondence should be addressed.
Appl. Sci. 2019, 9(20), 4331; https://doi.org/10.3390/app9204331
Received: 13 August 2019 / Revised: 25 September 2019 / Accepted: 4 October 2019 / Published: 15 October 2019
To deal with increasingly competitive challenges, today’s companies consider supplier performance as a crucial factor to their competitive advantage. Supplier development is one of the recent approaches to supplier performance enhancement and consistently requires relationship-specific investments. It is important to invest money, experts and/or machines in a supplier to minimize the risk of an inefficient supply chain while maximizing the level of profitability. This paper provides the number of optimization models to confront this issue utilizing Model Predictive Control. We consider a centralized and distributed setting with two manufacturers and one supplier, which enables us to simulate more realistic scenarios. We implement cooperative and non-cooperative scenarios to assess their impact on the manufacturers’ revenue. Results reveal that the cooperative setting between manufacturers pays off better than non-cooperative and collaborative settings in long-term investments. However, for short-term investments, the non-cooperative setting performs better than the others. We can conclude that, in short-term supplier development investments, an added value is generated since both the manufacturers and the supplier gain flexibility, therefore, investing separately can end up with higher profit for both manufacturers. View Full-Text
Keywords: supplier development; multi-manufacturer; game theory; decision making support; optimization; simulation; model predictive control supplier development; multi-manufacturer; game theory; decision making support; optimization; simulation; model predictive control
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Dastyar, H.; Pannek, J. Numeric Evaluation of Game-Theoretic Collaboration Modes in Supplier Development. Appl. Sci. 2019, 9, 4331.

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