Quality Strategy of Pooling Production in a Decentralized Supply Chain

doi:10.3969/j.issn.1007-7375.2021.02.006

Abstract

Abstract: Employing the Tullock contest success function, a noncooperative game model is established to explain how the players compete in the quality contest. The strategy of pooling production definitely brings supplier's quality improvement with comparison to outsourcing while conditionally making the manufacturer's product quality higher than in-house manufacturing. The manufacturer prefers pooling production to outsourcing and in-house manufacturing if the wholesale price charged by the supplier is sufficient low enough. However, the supplier could be hurt by the implementation of pooling production when comparing with outsourcing. Additionally, the manufacturer may prefer a fiercer contest, while the supplier may enjoy a more temperate contest.

Key words: supply chain quality management, the Tullock contest success function, pooling production, game theory

CLC Number:

F272.3

JIANG Yixiu, SONG Bingliang. Quality Strategy of Pooling Production in a Decentralized Supply Chain[J]. Industrial Engineering Journal, 2021, 24(2): 43-48,84.

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