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From Choice Of Procurement Strategy To Supply Network Configuration: An Evolutionary Approach

Author

Listed:
  • YIFENG ZHANG

    (Department of Management Information Systems, University of Illinois at Springfield, One University Plaza, Springfield, IL 62703, USA)

  • SIDDHARTHA BHATTACHARYYA

    (Department of Information and Decision Sciences, University of Illinois at Chicago, 601, South Morgan Street, Chicago, IL 60607, USA)

  • XIAOMING LI

    (Department of Business Administration, Tennessee State University, 3500 John A Merritt Blvd, Nashville, TN 37209, USA)

Abstract

This study examines the complex and evolutionary nature of supply network configuration. Taking a bottom-up approach, we examine how supply network configuration at the macro-level evolves as a result of individual retailers' dynamic choice of procurement strategies at the micro-level. Employing agent-based modeling, we focus on the effects of switch cost and distributors' ordering policy on the evolution of supply network configuration. Our results show that (1) supply networks tend to evolve into a set of separate supply chains when switch cost is high and into an integrated network when switch cost is low, (2) a responsive ordering policy adopted by distributors is more conducive to the integrated network configuration than a non-responsive policy, and (3) lack of coordination among retailers in their dynamic choice of procurement strategies hurts not only the overall system performance, but also retailers themselves. More importantly, our study demonstrates the capabilities of agent-based modeling as a methodology for researching complex supply network issues.

Suggested Citation

  • Yifeng Zhang & Siddhartha Bhattacharyya & Xiaoming Li, 2010. "From Choice Of Procurement Strategy To Supply Network Configuration: An Evolutionary Approach," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 9(01), pages 145-173.
    • Handle: RePEc:wsi:ijitdm:v:09:y:2010:i:01:n:s0219622010003671
    DOI: 10.1142/S0219622010003671
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    Cited by:

    1. Heng Du & Tiaojun Xiao, 2019. "Pricing Strategies for Competing Adaptive Retailers Facing Complex Consumer Behavior: Agent-based Model," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 18(06), pages 1909-1939, November.
    2. Jafarian, Ahmad & Rabiee, Meysam & Tavana, Madjid, 2020. "A novel multi-objective co-evolutionary approach for supply chain gap analysis with consideration of uncertainties," International Journal of Production Economics, Elsevier, vol. 228(C).

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