Strategic Outsourcing with Delay-Sensitive Customers
This paper investigates the impact of customers delay sensitivity on the pricing and capacity strategy of supply chain, in which a provider (or a supplier) provides a service or distributes a product to an independent outsourcer (or a retailer). The problem is modeled as a Stackelberg game in the context of a simple queuing system, where the provider, as the leader of the game, determines the capacity and the service price charged to the outsourcer. Reacting to the providers decisions, the outsourcer sets the market (service) price to provide the service to the customers who incur the delay cost if the waiting time exceeds a certain tolerance level. Our result indicates that although the outsourcer does not incur a capacity cost, the outsourcing strategy is not always optimal. We show that the outsourcing strategy should be adopted only when the customer required activity performance is higher than a certain threshold. In an oligopolistic setting, the value of threshold decreases with the number of outsourcers in the market.
outsourcing price- and delay sensitive customers tolerance threshold game theory
Lu Qiang Li Chen Wei-yu Kevin Chiang
Department of Management Sciences City University of Hong Kong, Kowloon Tong, Hong Kong
国际会议
香港·广州
英文
439-444
2010-07-25（万方平台首次上网日期，不代表论文的发表时间）