A Supply Chain Generalized Network Oligopoly Model for Pharmaceuticals under Brand Differentiation and Perishability

Transportation Research E, Forthcoming

39 Pages Posted: 29 Sep 2011 Last revised: 12 Jan 2012

See all articles by Amir H. Masoumi

Amir H. Masoumi

Manhattan College - Department of Management and Marketing, School of Business

Min Yu

University of Portland - Dr. Robert B. Pamplin, Jr. School of Business Administration; University of Massachusetts Amherst - Isenberg School of Management - Department of Finance and Operations Management

Anna Nagurney

University of Massachusetts Amherst - Isenberg School of Management - Department of Operations and Information Management

Date Written: January 2012

Abstract

In this paper, we construct a generalized network oligopoly model with arc multipliers for supply chains of pharmaceutical products using variational inequality theory. The model captures the Cournot competition among the manufacturers who seek to determine their profit-maximizing product flows, which can be perishable, with the consumers differentiating among the products of the firms, whether branded or generic, and the firms taking into consideration the discarding costs. The numerical examples demonstrate that a brand pharmaceutical product may lose its dominant market share as a consequence of patent rights expiration and because of generic competition.

Keywords: perishable products, pharmaceutical companies, healthcare, supply chains, brand differentiation, generalized network

Suggested Citation

Masoumi, Amir H. and Yu, Min and Nagurney, Anna, A Supply Chain Generalized Network Oligopoly Model for Pharmaceuticals under Brand Differentiation and Perishability (January 2012). Transportation Research E, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1934463 or http://dx.doi.org/10.2139/ssrn.1934463

Amir H. Masoumi

Manhattan College - Department of Management and Marketing, School of Business ( email )

Manhattan College Parkway
Riverdale, NY 10471
United States

Min Yu

University of Portland - Dr. Robert B. Pamplin, Jr. School of Business Administration

Portland, OR 97203
United States

University of Massachusetts Amherst - Isenberg School of Management - Department of Finance and Operations Management

Department of Operations and Information Managemen

Anna Nagurney (Contact Author)

University of Massachusetts Amherst - Isenberg School of Management - Department of Operations and Information Management ( email )

Amherst, MA 01003-4910
United States

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