Effects of imperfect quality items in the asymmetric information structure in supply chain model

Yadav, R.; Pareek, S.; Mittal, M.; Mehta, S.

Growing Science » Uncertain Supply Chain Management » Effects of imperfect quality items in the asymmetric information structure in supply chain model

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Uncertain Supply Chain Management

ISSN 2291-6830 (Online) - ISSN 2291-6822 (Print) Quarterly Publication Volume 6 Issue 3 pp. 287-298 , 2018

Effects of imperfect quality items in the asymmetric information structure in supply chain model Pages 287-298 Download PDF

Authors: Rita Yadav, Sarla Pareek, Mandeep Mittal, Sumil Mehta

DOI: 10.5267/j.uscm.2017.11.002

Keywords: Supply chain, Imperfect quality items, Game theory, Non-cooperative games, Seller Stackelberg game, Symmetric and asymmetric information structure

Abstract: Most of the supply chain models have been developed under symmetric information structure i.e. players have complete knowledge of each other’s policies. But in most of the cases, players do not have complete information about the other players i.e. some information regarding their businesses is hidden. This paper studies supply chain model of imperfect quality items under asymmetric information in which unit price taken by the buyer and unit marketing expenditure are influencing product’s demand. This information is hidden to seller. The seller delivers the supply to the buyer. Each delivered lot goes through an inspection process at the buyer’s side. In the inspection process, the items are divided into two categories. The first category is perfect quality items while the second category is of imperfect quality items. After the inspecting the lots, the perfect quality commodities are to be sold at selling price and the imperfect items are supposed to get sold at a discounted price. The interaction between two constituents of the supply chain is modeled by non-cooperative Seller Stackelberg game approach in which the role of leader is played by the seller while the role of follower is played by the buyer. In our proposed model, the seller does not have information related to market demand but the buyer does. Numerical examples and sensitivity analysis explain the significance of the theory.

How to cite this paper

 Yadav, R., Pareek, S., Mittal, M & Mehta, S. (2018). Effects of imperfect quality items in the asymmetric information structure in supply chain model.Uncertain Supply Chain Management, 6(3), 287-298.

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