Supply Chain Design With Cross Sales, Product Design, and Price -Setting Competitive Newsvendors

130 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2005.Essay 3 addresses the problem of supply chain design under demand uncertainty. Consider two manufacturers, each producing a substitutable product and selling it through either a decentralized or an integrated retailer, which is modeled as a price-setting newsvendor. A multiplicative demand function incorporating a random factor &egr; is assumed. Results indicate the following: if &egr; is uniformly distributed on [0, x], then the equilibrium design does not depend on the variance of &egr;; if &egr; is uniformly distributed on [1-r, 1+r], then the equilibrium design does depend on the variance. In particular, an increase in r favors the integrated structure where both channels are integrated and hurts the decentralized configuration where both channels are decentralized. I also establish that production cost always favors the decentralized structure while hurts the integrated one.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD