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author:

Zheng, Xiao-Xue (Zheng, Xiao-Xue.) [1] | Liu, Zhi (Liu, Zhi.) [2] | Li, Kevin W. (Li, Kevin W..) [3] | Huang, Jun (Huang, Jun.) [4] | Chen, Ji (Chen, Ji.) [5]

Indexed by:

EI

Abstract:

This paper investigates a three-echelon closed-loop supply chain (CLSC) consisting of a manufacturer, a distributor, and a retailer, where the retailer exhibits fairness concerns. Cooperative and non-cooperative game theoretic analyses are employed to characterize interactions among different parties. Analytical results confirm the conventional wisdom: with the retailer's fairness concerns, the channel profits under the decentralized and partial-coalition models underperform that under the centralized model. To find an appropriate profit allocation scheme to coordinate the supply chain system with fairness concerns, we resort to the cooperative game theory. To this end, we first derive the characteristic function form of the cooperative game based on the equilibrium profits under centralized, decentralized and different partial-coalition models. Subsequently, we propose three coordination mechanisms based on the Shapley value, nucleolus solution, and equal satisfaction to allocate surplus profit. The three mechanisms are then evaluated by using numerical experiments. We further examine how the retailer's fairness concerns affect profit allocation under the three mechanisms. The key innovation is to incorporate the retailer's fairness concerns into the coordination of a three-echelon CLSC. Our contributions are twofold: First, cooperative game-theoretic mechanisms are put forward to coordinate the three-echelon CLSC with a fairness-minded retailer. Second, we investigate how the retailer's fairness concerns affect the CLSC members' pricing decision and surplus profit allocation. Our studies confirm that the resulting profit allocation schemes satisfy both individual and collective rationality and fall in the core of the cooperative game, thereby making the grand coalition stable and suggesting viable options to coordinate the CLSC system. Further analyses reveal that different coordination mechanisms benefit the three CLSC members differently. These research findings help CLSC managers to understand what options are available and identify possible pathways for them to foster cooperation and achieve equitable allocation of surplus profit. © 2019 Elsevier B.V.

Keyword:

Game theory Profitability Sales Supply chains

Community:

  • [ 1 ] [Zheng, Xiao-Xue]College of Transportation and Civil Engineering, Fujian Agriculture & Forestry University, Fuzhou; Fujian; 350002, China
  • [ 2 ] [Zheng, Xiao-Xue]College of Economics and Management, Fuzhou University, Fuzhou; Fujian; 350002, China
  • [ 3 ] [Zheng, Xiao-Xue]Odette School of Business, University of Windsor, Windsor; Ontario; N9B 3P4, Canada
  • [ 4 ] [Liu, Zhi]College of Management Engineering, Anhui Polytechnic University, Wuhu; Anhui; 241000, China
  • [ 5 ] [Liu, Zhi]Odette School of Business, University of Windsor, Windsor; Ontario; N9B 3P4, Canada
  • [ 6 ] [Li, Kevin W.]College of Economics and Management, Fuzhou University, Fuzhou; Fujian; 350002, China
  • [ 7 ] [Li, Kevin W.]Odette School of Business, University of Windsor, Windsor; Ontario; N9B 3P4, Canada
  • [ 8 ] [Huang, Jun]Business School, Hunan University, Changsha; Hunan; 410082, China
  • [ 9 ] [Chen, Ji]College of Statistics and Mathematics, Zhejiang Gongshang University, Hangzhou; 310018, China

Reprint 's Address:

  • [huang, jun]business school, hunan university, changsha; hunan; 410082, china

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Source :

International Journal of Production Economics

ISSN: 0925-5273

Year: 2019

Volume: 212

Page: 92-110

5 . 1 3 4

JCR@2019

9 . 8 0 0

JCR@2023

ESI HC Threshold:150

JCR Journal Grade:1

CAS Journal Grade:1

Cited Count:

WoS CC Cited Count:

SCOPUS Cited Count: 171

ESI Highly Cited Papers on the List: 0 Unfold All

WanFang Cited Count:

Chinese Cited Count:

30 Days PV: 0

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