Incentives for cooperative planning in focal supply networks

We study the supply planning problem of focal production networks that operate typically on unstable markets of customized mass products. A two-level coordination platform is presented that makes possible to maintain high service level while keeping overall costs---including production, setup, inventory holding and expected obsolete inventory costs---at a minimum. After proposing a novel model for coordinating the channel between the manufacturer and its suppliers, we discuss the decentralized version of this model and analyze the conditions of self-interested cooperation