Cooperation between Multiple Newsvendors with Warehouses

Manufacturing & Service Operations Management, Vol. 10, No. 2, pp. 311–324

CentER Discussion Paper No. 2004-34

19 Pages Posted: 24 Jun 2004 Last revised: 5 Mar 2012

See all articles by Ulas Ozen

Ulas Ozen

Ozyegin University / Faculty of Business

Jan C. Fransoo

Tilburg University - Tilburg University School of Economics and Management

Henk Norde

Tilburg University - Center For Economic Research; Tilburg University - Department of Econometrics & Operations Research

Marco Slikker

Eindhoven University of Technology (TUE) - School of Industrial Engineering

Date Written: 2004

Abstract

This study considers a supply chain that consists of n retailers, each of them facing a newsvendor problem, m warehouses and a supplier. The retailers are supplied with a single product via some warehouses. In these warehouses, the ordered amounts of goods of these retailers become available after some lead time. At the time that the goods arrive at the warehouses, demand realizations are known by the retailers. The retailers can increase their expected joint profits by coordinating their orders and making allocations after demand realization. For this setting, we consider an associated cooperative game between the retailers. We show that this associated cooperative game has a nonempty core. Finally, we study a variant of this game, where the retailers are allowed to leave unsold goods at the warehouses.

Keywords: Supply chain management, newsvendor, warehouse, game theory, balancedness

Suggested Citation

Ozen, Ulas and Fransoo, Jan C. and Norde, Henk W. and Slikker, Marco, Cooperation between Multiple Newsvendors with Warehouses (2004). Manufacturing & Service Operations Management, Vol. 10, No. 2, pp. 311–324, CentER Discussion Paper No. 2004-34, Available at SSRN: https://ssrn.com/abstract=557825 or http://dx.doi.org/10.2139/ssrn.557825

Ulas Ozen

Ozyegin University / Faculty of Business ( email )

Jan C. Fransoo

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://https://www.tilburguniversity.edu/staff/jan-fransoo

Henk W. Norde (Contact Author)

Tilburg University - Center For Economic Research ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 3245 (Phone)

Tilburg University - Department of Econometrics & Operations Research ( email )

Tilburg, 5000 LE
Netherlands

Marco Slikker

Eindhoven University of Technology (TUE) - School of Industrial Engineering ( email )

P.O. Box 513
5600 MB Eindhoven
Netherlands