Journal article
Strategic Inventory with an Unreliable Manufacturer across Multiple Supply Chain Structures
Omega (Oxford), v 133, p103229
01 Jun 2025
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Supply stability has become increasingly crucial amid the reshaping of global supply chains. This paper introduces a novel analytical framework to examine the retailer's strategic inventory decisions and the effects on the profits of the manufacturer and the supply chain under three supply chain structures: complete decentralization, partial centralization, and complete centralization. Utilizing a game-theoretic approach, we derive equilibrium outcomes revealing that strategic inventory enhances the manufacturer's profit under complete decentralization. In contrast, this positive effect on the manufacturer's profit is not always observed under partial centralization. Our findings also indicate that the retailer's decision to adopt strategic inventory, along with the impact on the supply chain's profit, is contingent upon the supply stability level and the unit inventory cost. We further analyze the performance of the supply chain under three structures and find that complete centralization always achieves the optimal profit when the retailer does not choose strategic inventory. However, complete centralization does not always achieve the optimal profit when the retailer adopts strategic inventory. These findings provide new insights into the role of strategic inventory across various supply chain structures.
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Details
- Title
- Strategic Inventory with an Unreliable Manufacturer across Multiple Supply Chain Structures
- Creators
- Wan Ke - Xidian UniversityXiaoyang Zhou - Xi An Jiao Tong Univ, Sch Management, Xian 710049, Peoples R ChinaBenjamin Lev - Drexel University, Decision Sciences (and Management Information Systems)Wenjing Shen - Drexel University, Decision Sciences (and Management Information Systems)
- Publication Details
- Omega (Oxford), v 133, p103229
- Publisher
- Elsevier
- Number of pages
- 22
- Grant note
- 22 ZD132 / Key Project of the National Social Science Foundation of China; National Office of Philosophy and Social Sciences 72271194 / National Natural Science Foundation of China; National Natural Science Foundation of China (NSFC)
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Decision Sciences (and Management Information Systems)
- Web of Science ID
- WOS:001374406200001
- Scopus ID
- 2-s2.0-85211053196
- Other Identifier
- 991021955314104721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Management
- Operations Research & Management Science