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Service Chain Coordination Using Salvage Manipulation

Author

Listed:
  • Andrew Manikas
  • Michael Godfrey

Abstract

This paper introduces a new coordinating mechanism for a two-echelon service chain with a single service retailer and multiple suppliers. The retailer sells a bundled product with perishable demand to the end customer. Prior to the selling season, suppliers must make components available to the retailer, and the retailer must acquire capacity. The bundled components consist of service capacity at the retailer and products from the suppliers. We demonstrate our salvage manipulation mechanism using an example of a travel agency that provides vacation packages using components provided by suppliers in a service chain. Our mechanism is simple to calculate and does not require the use of burdensome revenue-sharing contracts.

Suggested Citation

  • Andrew Manikas & Michael Godfrey, 2014. "Service Chain Coordination Using Salvage Manipulation," International Journal of Management and Marketing Research, The Institute for Business and Finance Research, vol. 7(2), pages 15-27.
    • Handle: RePEc:ibf:ijmmre:v:7:y:2014:i:2:p:15-27
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Service Chain; Coordination; Newsvendor; Exogenous Pricing;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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