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A proposal of bargaining solution for cooperative contract in a supply chain

Author

Listed:
  • Wakana Kato

    (Okayama University)

  • Ikuo Arizono

    (Okayama University)

  • Yasuhiko Takemoto

    (Prefectural University of Hiroshima)

Abstract

As a problem in supply chain management, the decision problem of terms and conditions of a contract between a supplier and a retailer is recognized commonly. The concept of cooperative bargaining between a supplier and a retailer is the key concepts to resolve this problem in the supply chain. Then, the bargaining evaluation function by Nash in the game theory exists as a tool to obtain the solution by cooperation bargaining. The Nash bargaining solution is derived under the premise that a power balance between a supplier and a retailer is equal. However, the situation where the power balance between a supplier and a retailer in actual bargaining is not equal is supposed frequently. For the purpose of reflecting the power balance in obtaining the bargaining solution, the concept of a general bargaining solution was proposed and then the general bargaining evaluation function for obtaining the general bargaining solution was devised. However, in the case of adopting the general bargaining evaluation function as a bargaining tool, some problems are included. In this article, we address the problems in the general bargaining solution. Then, we propose a new concept of bargaining process to obtain a solution under considering the existence of power balance between a supplier and a retailer.

Suggested Citation

  • Wakana Kato & Ikuo Arizono & Yasuhiko Takemoto, 2018. "A proposal of bargaining solution for cooperative contract in a supply chain," Journal of Intelligent Manufacturing, Springer, vol. 29(3), pages 559-567, March.
    • Handle: RePEc:spr:joinma:v:29:y:2018:i:3:d:10.1007_s10845-015-1140-7
    DOI: 10.1007/s10845-015-1140-7
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    References listed on IDEAS

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    1. Vlachos, Dimitrios & Dekker, Rommert, 2003. "Return handling options and order quantities for single period products," European Journal of Operational Research, Elsevier, vol. 151(1), pages 38-52, November.
    2. Nagarajan, Mahesh & Sosic, Greys, 2008. "Game-theoretic analysis of cooperation among supply chain agents: Review and extensions," European Journal of Operational Research, Elsevier, vol. 187(3), pages 719-745, June.
    3. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
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    Cited by:

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    2. I. Robert Chiang & Jhih‐Hua Jhang‐Li, 2020. "Competition through Exclusivity in Digital Content Distribution," Production and Operations Management, Production and Operations Management Society, vol. 29(5), pages 1270-1286, May.
    3. Arab Momeni, Mojtaba & Bagheri, Mehdi, 2022. "Shared warehouse as an inter-supply chain cooperation strategy to reduce the time-dependent deterioration costs," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).

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